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January 15, 1982

Catherine C. WINKLER, et al., Defendants

The opinion of the court was delivered by: GREEN


The instant action is before the court on the defendants' motion to dismiss, as opposed by the plaintiff, and plaintiff's unopposed motion for summary judgment. Jurisdiction exists pursuant to 28 U.S.C.A. § 1331 (Supp.1981).

 On July 17, 1980, defendants and the Washington House Tenants' Association, Inc. entered into a written agreement for the sale of certain real property located in Washington, D.C. The Tenants' Association, in turn, assigned all of its rights under the contract to the Washington House Limited Partnership. Plaintiff is the sole general partner of Washington House Limited Partnership. Neither plaintiff's standing to bring the instant action nor the assignment of rights under the contract is contested by the defendants.

 The contract between defendants and plaintiff's assignors provided that defendants were to convey the property for a price of $ 2,490,000.00 and various other promises. The agreement was not a form contract, but rather one drafted by counsel for the sellers-defendants. It provided, among other things, that time was of the essence to the defendants, that the defendants bore the risk of loss until delivery of the deed, and that the agreement constituted the entire contract between the parties. In addition, the agreement provided that:

With respect to Winkler's Premises, examination of title, tax certificate, conveyancing, notary fees, D.C. deed recordation tax, all settlement charges, and all recording charges are to be at the sole cost and expense of the Association, provided, however, that if upon examination the title should be found defective and is not remedied as aforesaid, Winkler hereby agrees to pay the cost of the examination of the title.

 The "Association" referred to is, of course, plaintiff's assignor, and "Winkler" denotes the collective defendants.

 After the making of the contract, but before the final closing and transfer of the property, the District of Columbia Code was amended to impose a one percent (1%) transfer tax on any property transferred after September 13, 1980. D.C.Code § 47-903 provides:

(a) There is imposed on each transferor for each transfer at the time the deed is submitted to the Mayor for recordation a tax at the rate of 1 percent of the consideration for such transfer: Provided, that in any case where application of the rate of tax to the consideration for the transfer results in a total tax of less than $ 1 the tax shall be $ 1.
(b) Each such deed shall be accompanied by a return, under oath, in such form as the Mayor may prescribe, executed by all the parties to the deed, setting forth the consideration for the deed, the amount of tax payable, and such other information as the Mayor may require.
(c) The transferor in a transfer shall have responsibility for payment of the taxes imposed by this section: Provided, however, that if the transferor should fail to make payment the transferee shall be jointly and severally liable with the transferor for payment of said taxes. Neither the United States nor the District of Columbia governments shall be subject to liability for the tax imposed under this section.
(d) The Mayor is authorized to prescribe, by regulation, reasonable extensions of time for the filing of the return required by subsection (b) of this section.

 According to the terms of the statute, the seller of the property was the one given responsibility for payment of the tax, even though the District of Columbia was given the additional powers to look to the buyer in the event the seller failed to pay.

 The final closing between defendants and plaintiff's assignor did not take place until April 23, 1981. At settlement, however, the defendants refused to pay the transfer tax. Defendants do not dispute this fact. *fn1" Without payment of the tax, the transfer could not lawfully be completed. Plaintiff, therefore, paid the tax, alleging that its commitments for financing and construction would have been severely disrupted had the transfer not been consummated that day. The transfer was then completed, and neither party has charged the other with a failure to meet its contractual commitments, except for the instant action by plaintiff for reimbursement of the amount of the tax, $ 24,900.00, and costs.

 By refusing to pay the transfer tax imposed upon them defendants breached their contract with plaintiff's assignors. A statutory duty imposed after the making of a contract does not relieve a party of its contractual obligations, except when the change in law renders the contract unenforceable for impossibility or illegality. Defendants were given the responsibility to pay the transfer tax by D.C.Code § 47-903. Their refusal to comply with ...

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