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AIR TRANSP. ASSN. OF AMERICA v. LENKIN

April 20, 1989

THE AIR TRANSPORT ASSOCIATION OF AMERICA, Plaintiff,
v.
MELVIN LENKIN, et al., Defendants


Louis F. Oberdorfer, United States District Judge.


The opinion of the court was delivered by: OBERDORFER

LOUIS F. OBERDORFER, UNITED STATES DISTRICT JUDGE

 On February 25, 1971, plaintiff signed an agreement to lease office space from defendants in a new building at 1711 New York Avenue, N.W., Washington, D.C. Seventeen years later, plaintiff filed this suit, alleging that defendants have been incorrectly interpreting one of the lease's provisions and seeking a declaratory judgment as to the provision's meaning and judgment in the amount of overpaid rent attributable to the alleged improper interpretation. Because this action was filed after the expiration of the applicable statute of limitations, defendants' motion for summary judgment must be granted. In addition, even had this suit been timely filed, defendants' motion would be granted because the provision in question is ambiguous and the relevant extrinsic evidence emphatically supports defendants' interpretation.

 The base rent in 1973 for the office space portion of the leased space (designated "Space 1" in the lease) was $ 7.00 per square foot. See Lease Agreement (Feb. 25, 1971) ("Lease") at para. 3(a). Paragraph 3(c) of the Lease states:

 
Tenant covenants and agrees to pay to Landlord as additional yearly rental for Space 1 and Space 2 commencing on the 1st day of January 1974, and continuing throughout the term and any renewals or extensions thereof, one-twelfth (1/12) per month of Tenant's proportionate share (Tenant square feet in Space 1 and Space 2 divided by building gross square feet exclusive of Space 3, garage, and penthouse) of any increases in annual real estate taxes and building operating expenses above these expenses for the preceding year. For the purposes of this computation, the total annual real estate taxes and building operating expenses for calendar year 1973 shall be two and 25/100 dollars ($ 2.25) times the gross square feet exclusive of garage and penthouse.

 Plaintiff reads this language as setting the total rent per square foot each year at $ 7.00 plus the difference between the previous and current years' taxes and operating expenses per square foot. Thus, if taxes and operating expenses per square foot were $ 2.75 in 1974 and $ 3.00 in 1975, plaintiff would owe $ 7.25 per square foot in 1975. *fn1" Defendant, however, argues that this clause should be interpreted as "escalating," that is, that the total rent per square foot should be calculated by adding the difference between $ 2.25 (the 1973 level) and the current taxes and operating expenses to the base rent of $ 7.00 per square foot. Thus, in the example given above, the rent in 1975 would be $ 7.75, as opposed to $ 7.25, per square foot. *fn2"

 Every year since 1974, defendants prepared for plaintiff's inspection a rent calculation based on defendants' interpretation of para. 3(c). See Defendants' Exhibit Volume at 37-171. Although plaintiff occasionally questioned some of the elements of this rent calculation, prior to the filing of this lawsuit plaintiff never questioned defendants' interpretation of para. 3(c). Thus, plaintiff has been on notice since at least December 3, 1974, that defendants were calculating their rent based on an "escalating" interpretation of para. 3(c). See id. at 43-49. Yet plaintiff only objected to this interpretation in 1988, over 13 years later.

 An action is barred under D.C. Code § 12-301(6) if it is brought more than 12 years "from the time the right to maintain the action accrues." The right to maintain this action accrued when plaintiff received the December 3, 1974 letter from Herbert L. Goda to Joseph F. Hintersehr, the first request for rental payments that definitively expressed defendants' interpretation of para. 3(c). *fn3" See Defendants' Exhibit Volume at 43-49. At that point, plaintiff could have sued for, inter alia, the following relief:

 
1) A declaratory judgment that defendants have been improperly calculating the additional rent due and owing and a determination from the court as to the proper base rent and additional rent past, present, and in futuro due under the Lease (including any extant Lease extensions);
 
2) Judgment in its favor and against defendants, jointly and severally, for all overpayments in additional rent and base rent during the Lease and any extensions thereof;
 
3) Such additional damages as may have accrued and/or continue to accrue; and
 
4) Reasonable costs and attorneys' fees.

 This is the same relief plaintiff seeks in its complaint. Thus, all of the elements of plaintiff's cause of action were present in 1974, that was "the time the right to maintain the action accrue[d]" within the meaning of D.C. Code § 12-301(6), and that was over 12 years before the complaint was filed. ...


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