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02/09/93 EDWARD R. CAMACHO v. 1440 RHODE ISLAND

February 9, 1993

EDWARD R. CAMACHO, APPELLANT
v.
1440 RHODE ISLAND AVENUE CORPORATION AND ARVEN PLUMLEY, APPELLEES



Appeal from the Superior Court of the District of Columbia; (Hon. Rufus G. King, III, Trial Judge)

Before Steadman and Sullivan, Associate Judges, and Belson, Senior Judge.

The opinion of the court was delivered by: Steadman

STEADMAN, Associate Judge: This appeal arises out of the eviction of appellant from the Hawthorne Hotel. The hotel was owned by the corporate appellee, 1440 Rhode Island Avenue corporation. *fn1 The individual appellee, Arven Plumley, was president and chief operating officer of the corporation, a director, and a fifty percent shareholder. At a bench trial, appellant sought compensatory and punitive damages for wrongful eviction, conversion, and negligence. The trial court found that appellant was entitled to compensatory damages from the corporate appellee for negligence and wrongful eviction, *fn2 including non-economic damages for humiliation and embarrassment, but not to punitive damages. The court further found that Plumley, the individual appellee, was not liable on any of the claims.

We agree with appellant's principal contention on appeal that the trial court erred by applying incorrect standards in determining the individual liability of appellee Plumley. *fn3 Accordingly, we remand to the trial court for further proceedings consistent with this opinion.

I.

Appellant, Edward Camacho, rented a room at the Hawthorne Hotel on December 4, 1985, and lived there for approximately one month. Appellant testified that he had been told that although the hotel did not have monthly rates, if he stayed more than one month he would get a refund of several hundred dollars. Appellee Plumley testified that the hotel did not have such a policy and that he had never authorized a refund in any particular case. For the first thirty days of his stay, appellant paid his daily rent. Appellant then requested a refund and an employee of the hotel denied the existence of any refund policy. Appellant believed that he was entitled to a refund, so he did not pay rent on the thirty-first or thirty-second day. On the thirty-second day, the police were called to evict appellant from the hotel.

Upon being evicted from the hotel, appellant had nowhere to live, and thus spent the next few nights at a bus station and then a period of time at various homeless shelters. While staying at one of those shelters, appellant returned to the Hawthorne Hotel to reclaim his belongings, and was told that they had been discarded on the day of his eviction.

Appellant filed an action against Arven Plumley and 1440 Rhode Island Avenue Corporation in Superior Court on December 6, 1986, alleging negligence, conversion, and violations of the hotel lien law, based upon his eviction from the Hawthorne Hotel. He also filed a tenant petition against the corporate appellee (as a "housing provider") at the Rental Accommodations and Conversion Division of the Department of Consumer and Regulatory Affairs ("RACD"). *fn4

A hearing examiner found, inter alia, that the Hawthorne Hotel was not exempt from the Rental Housing Act of 1985 *fn5 as appellees claimed, *fn6 and that the first room rented to appellant was below the minimum space requirement of the housing regulations. *fn7 The examiner also found that appellant had an agreement with the housing provider, in which appellant was to received a refund of $324.00 after staying at the hotel for one month. The examiner further found that the housing provider had resorted to self-help in evicting appellant, without seeking judicial adjudication of appellant's claim that no rent was due, and without a judicial order divesting the tenant of his right of possession. *fn8 Finally, the examiner found that the housing provider's violations of the Act were committed knowingly and in bad faith.

Based on these findings of fact, the examiner concluded as a matter of law that the hotel was subject to the Rental Housing Act and was not properly registered under the Act, *fn9 that the hotel as a housing provider had charged appellant in excess of the rent ceiling, *fn10 had unlawfully reduced appellant's services and facilities, *fn11 and had unlawfully retaliated against appellant. *fn12 The hearing examiner also concluded that the violations of the Act were committed in bad faith, and therefore, that appellant was entitled to attorney's fees and a treble refund of all rent paid to the housing provider. *fn13 No appeal was taken from this decision.

After the hearing examiner's ruling, appellant moved to amend his Superior Court complaint to include claims for wrongful eviction, enforcement of the RACD decision, and punitive damages. After a non-jury trial, the trial court found that appellant was entitled to enforcement of the RACD decision, and compensatory damages for negligence and wrongful eviction from the corporate appellee, but not to punitive damages. The trial court divided the compensatory damages into two parts: (1) $2,000 for the value of the lost possessions, *fn14 and (2) $2,500 for humiliation and embarrassment. The court further ruled that Plumley, the individual appellee, was not liable on any of the claims, because appellant had failed to demonstrate either ultra vires acts or grounds to pierce the corporate veil.

II.

Appellant relies on two theories to hold Plumley individually liable for the eviction and negligence: (1) a corporate officer's individual liability for torts which the officer committed or participated in, and (2) a shareholder's personal liability upon the court's "piercing the corporate veil." As to the former, appellant contends that the trial court did not rule on this theory, but instead applied the law relevant to a third theory, viz., ultra vires activity, or, otherwise put, the trial court erroneously limited a corporate officer's individual liability for torts solely to those that were ultra vires. *fn15 As to the latter, appellant claims that the ...


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