Kids Holdings, Inc. v. Hinojosa

311 A.3d 910

KIDS HOLDINGS, INC., Appellant,

v.Cordia HINOJOSA, Appellee.

No. 23-CV-0108

District of Columbia Court of Appeals.

Submitted October 16, 2023

Decided March 21, 2024

On Appeal from the Superior Court of the District of Columbia (2018-CA-005961-R(RP)), (Hon. Yvonne Williams, Trial Judge)

Ian G. Thomas and Tracy L. Buck, Washington, DC, were on the brief for appellant.

Tyler Jay King, Washington, DC, was on the brief for appellee.

Before Beckwith and McLeese,^* Associate Judges, and Thompson, Senior Judge.

McLeese, Associate Judge:

Appellant Kids Holdings, Inc. challenges an order that (1) granted appellee Cordia Hinojosa relief from a judgment in Kids Holdings’s favor on the basis that Kids Holdings was not registered to do business in the District of Columbia; and (2) for that reason, quashed a writ that the Superior Court had issued to permit Kids Holdings to force the sale of real property owned by Ms. Hinojosa in order to satisfy the judgment. We vacate the order of the Superior Court and remand for further proceedings.

I. Factual and Procedural Background

The following facts appear to be undisputed. Kids Holdings filed an action alleging that Ms. Hinojosa had defaulted under a loan to finance the purchase of a parcel of real property. The trial court entered judgment for Kids Holdings in 2019, and this court affirmed that judgment in 2022.

Kids Holdings then began collection efforts, and the Superior Court issued a writ directing that Ms. Hinojosa’s property be sold to satisfy the judgment. Ms. Hinojosa filed a motion to quash the writ, which included a request that the judgment be vacated under Super. Ct. Civ. R. 60(b). In support of the latter request, Ms. Hinojosa argued that Kids Holdings was not registered to do business in the District and therefore could not maintain an action in Superior Court. See D.C. Code § 29-105.02 (requiring certain business entities doing business in D.C. to register with the Mayor and providing that entities that fail to register as required "may not maintain an action or proceeding in the District").

For the same reason, Ms. Hinojosa argued that the trial court should quash the writ. Ms. Hinojosa also objected to the issuance of the writ on the merits, arguing that the real property at issue was exempt from attachment because it was her home.

Kids Holdings opposed the request that the trial court vacate the judgment, arguing that the request was untimely. Kids Holdings also disputed Ms. Hinojosa’s argument that the property at issue was exempt from attachment.

The trial court granted "full relief" from the 2019 judgment, pursuant to Rule 60(b)(6). The trial court did not decide whether Section 29-105.02 establishes a ju- risdictional prerequisite to entering a judgment. Instead, the court concluded that the registration requirement in Section 29-105.02 is not waivable, and Ms. Hinojosa therefore was entitled to relief from the judgment even though Ms. Hinojosa had not raised Kids Holdings’s lack of registration before judgment was entered. For the same reason, the trial court granted the motion to quash the writ. Kids Holdings moved for reconsideration of the trial court’s order, and the trial court denied that motion.

II. Analysis

A. Timeliness of the Notice of Appeal

[1] Ms. Hinojosa argues that the notice of appeal was untimely filed. We disagree.

The trial court issued the order granting relief from the judgment and quashing the writ on November 9, 2022. Kids Holdings filed a motion to reconsider that ruling on November 15, 2022. The trial court denied that motion on January 19, 2023. Kids Holdings noted this appeal on February 10, 2023.

Generally, a notice of appeal in a civil case must be filed within thirty days after entry of judgment. D.C. App. R. 4(a)(1). That time period is tolled, however, if the party timely files certain post-judgment motions in the Superior Court. D.C. App. R. 4(a)(4). Kids Holdings’s motion to reconsider did not cite a specific court rule, but in substance it was a motion to vacate, alter, or amend the judgment under Super. Ct. Civ. R. 59(e). Such a motion is timely if filed within twenty-eight days after entry of judgment. Id. Kids Holdings’s motion therefore was timely and operated to toll the time period within which Kids Holdings could file a notice of appeal. After the trial court denied the motion, Kids Holdings had thirty days to note its appeal. D.C. App. R. 4(a)(4). Kids Holdings’s notice of appeal therefore was timely.

B. Subject-Matter Jurisdiction

[2] Ms. Hinojosa argues that the registration requirement under Section 29-105.02 goes to the trial court’s subject-matter jurisdiction. We hold as a matter of law that lack of registration under Section 29-105.02 does not affect the subject-matter jurisdiction of the Superior Court. See generally, e.g., Grayson v. AT&T Corp., 15 A.3d 219, 228 (D.C. 2011) (en banc) ("Whether the trial court has subject matter jurisdiction is a question of law which this court reviews de novo.") (internal quotation marks omitted).

[3, 4] "Subject matter jurisdiction concerns the court’s authority to adjudicate the type of controversy presented by the case under consideration." Davis & Assocs. v. Williams, 892 A.2d 1144, 1148 (D.C. 2006) (internal quotation marks omitted). The Superior Court is "a court of general jurisdiction with the power to adjudicate any civil action at law or in equity involving local law." King v. Kidd, 640 A.2d 656, 661 (D.C. 1993) (internal quotation marks omitted). "Unless the legislature has divested the Superior Court of jurisdiction of a particular subject matter through enactment of legislation, the court has general jurisdiction … over common law claims for relief." Id. The complaint in this case alleged a breach of contract, which falls within the subject-matter jurisdiction of the Superior Court.

As Ms. Hinojosa notes, however, Section 29-105.02 prohibits entities that have not properly registered to do business in the District from maintaining an action in the courts of the District. The question is whether that prohibition deprives the Superior Court of subject-matter jurisdiction to hear a case or instead imposes a non-jurisdictional disability on the unregistered company. We hold the latter.

[5] "[W]e have stressed that ... statutory restrictions on authority are generally non-jurisdictional unless the legislature clearly meant for noncompliance to have jurisdictional consequences." Fraternal Ord. of Police/Metro. Police Dep't Lab. Comm. v. D.C. Metro. Police Dep’t, 277 A.3d 1272, 1279 (D.C. 2022) (ellipsis and internal quotation marks omitted). That approach reflects the "drastic consequences that accompany a jurisdictional label, and a belief that the legislature does not impose [those consequences] lightly." Id. (internal quotation marks omitted). "For example, … jurisdictional constraints cannot be relaxed for equitable reasons[,] [n]or can they be waived or forfeited …." Id. (citations and internal quotation marks omitted).

This court has not previously decided whether Section 29-105.02 goes to the subject-matter jurisdiction of the Superior Court. We have, however, previously decided a case involving a similar statute that precluded a party who had not paid certain fees or penalties from "maintain[ing] … any action" in the District until the fees had been paid. York & York Constr. Co. v. Alexander, 296 A.2d 710, 711 (D.C. 1972) (internal quotation marks omitted). This court held that that statute did not require dismissal of pending litigation or bar reinstatement of a dismissed action if the necessary fees were paid. Id. at 713-15. That holding implies that the court was not treating the statute at issue as jurisdictional in character, because the lack of subject-matter jurisdiction at the time of the filing of a complaint generally cannot be remedied by later developments. See, e.g., Brown v. Hines-Williams, 2 A.3d 1077, 1080 (D.C. 2010) ("Whether a court acquires subject-matter jurisdiction over a case depends on the facts relevant to such jurisdiction as of the time the court’s jurisdiction is invoked, e.g., the date on which a suit is filed."); cf. Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004) ("It has long been the case that the jurisdiction of the court depends upon the state of things at the time of the action brought."; change of citizenship of party after action was filed did not remedy lack of diversity at time action was filed) (internal quotation marks omitted).

In reaching its holding, York relied on federal decisions interpreting a D.C. Code provision even more similar to Section 29-105.02. York, 296 A.2d at 713-14 (discussing, e.g., Hill-Lanham, Inc. v. Lightview Dev. Carp., 163 F. Supp. 475, 476 (D.D.C. 1957) (interpreting provision stating that corporation that transacted business in the District without certificate of authority could not "maintain an action" in the District until corporation obtained certificate of authority)). As we explained in York, "[t]he vast majority of courts interpret statutes which preclude maintaining an action until there is compliance with certain state requirements as meaning that compliance after an action has commenced is sufficient to enable the corporation to proceed with its suit." 296 A.2d at 714 (internal quotation marks omitted). In other words, "non-compliance [with such provisions] is a mere temporary disability and, therefore, capable of obviation at any stage of the proceedings." Hill-Lanham, 163 F. Supp. at 476.

Essentially for the reasons stated in York and Hill-Lanham, we hold that the registration requirement under Section 29-105.02 does not go to the Superior Court’s subject-matter jurisdiction.

C. Forfeiture

The trial court concluded that "an entity’s unregistered status is a non-waivable [defense] that may be raised at any time." We disagree.

[6] In general, defenses are forfeited if not timely raised before judgment. See, e.g., ...