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Lenkin Co. Management, Inc. v. District of Columbia Rental Housing Com'n

June 6, 1994


Petition for Review of an Order of The District of Columbia Rental Housing Commission

Before Ferren,* Acting Chief Judge, and Steadman and Sullivan, Associate Judges.

The opinion of the court was delivered by: Ferren

FERREN, Acting Chief Judge: D.C. Code § 45-2520 (e) (1990) provides that the Rent Administrator shall issue a decision on a capital improvement petition "within 60 days after receipt," and that the failure to do so "shall operate to allow the petitioner to proceed with a capital improvement." The principal question on appeal is whether a housing provider who begins to make a capital improvement within 60 days of filing the petition violates D.C. Code § 45-2520 (e) and, as a consequence loses the right to apply for a rent ceiling increase, even though the Rent Administrator fails to make a timely decision on the petition. The Rental Housing Commission (RHC) answered "Yes" and denied the requested rent ceiling increase for the improvements which the housing provider added during the 60 days after filing the petition. Deferring to the agency's reasonable interpretation of the statute it administers, and recognizing that petitioner did not question RHC's sanction in the event petitioner were held to have violated § 45-2520 (e), we affirm.

1. Facts and Proceedings

On March 4, 1988, petitioner filed a capital improvements petition with the Rental Accommodations and Conversion Division (RACD) of the Department of Consumer and Regulatory Affairs, seeking a rent ceiling increase based on several proposed capital improvements, including a new cooling tower and new lighting fixtures, for an apartment building located at 2424 Pennsylvania Avenue, N.W. (Pennsylvania House). Betty Arnold, a tenant in petitioner's building, intervened in opposition. RACD granted the petition with respect to the cooling tower and the lighting fixtures. Arnold appealed to RHC, contending that petitioner had violated D.C. Code § 45-2520 (e) (1990) *fn1 by proceeding with the capital improvements, without approval, within 60 days of filing the petition for the rent ceiling adjustment, and that petitioner, as a result, was not entitled to the requested rent ceiling increase.

RHC agreed with Arnold that the evidence tended to show petitioner had violated the statute. RHC accordingly remanded the case to RACD for a hearing. On remand, RACD found that petitioner had begun to replace the cooling tower within 60 days of filing its capital improvements petition. For that reason, RACD concluded that petitioner had violated § 45-2520 (e) and imposed a $500 fine against petitioner for willfully violating the statute.

RACD, however, ruled for petitioner on the lighting fixtures, allowing rent ceiling increases to account for all the fixtures. RACD found that petitioner had installed ten fixtures during the 60-day waiting period in good faith to respond to emergency needs, and that petitioner had installed the other 102 fixtures after the 60-day period had expired. Both parties appealed to RHC.

On December 31, 1992, RHC issued a Decision and Order agreeing with the tenant that "the hearing examiner had no statutory authority to create a 'good faith' exception to the . . . requirement that the housing provider wait 60 days before 'proceeding' with the installation of the ten (10) light fixtures." In addition, RHC "reversed the hearing examiner on the finding that [replacement of the ten] broken light fixtures . . . constituted, pursuant to D.C. Code § 45-2520 (g), *fn2 an emergency capital improvement." *fn3 RHC ruled, accordingly, that petitioner was not entitled to a rent ceiling increase for the ten light fixtures replaced within 60 days of filing the capital improvements petition. RHC upheld the increase, however, for the 102 fixtures installed after the 60 days. RHC also agreed with the tenant that petitioner was not entitled to a rent ceiling increase for the cooling tower because the record supported RACD's finding that petitioner had "proceeded" with the cooling tower replacement too soon, in violation of § 45-2520 (e). RHC also sustained the $500 fine RACD had imposed. Finally, RHC ordered a rent roll-back and refunds for excess rents already paid and remanded the case again to RACD for a determination of correctly adjusted rent ceilings attributable to installation of 102 light fixtures.

Both petitioner and the tenant filed motions for reconsideration. Petitioner argued primarily that § 45-2520 (e) does not "authorize the rent administrator to reject the capital improvement petition of a housing provider who prepares to implement a capital improvement before the end of the 60-day time period." (Emphasis added.) Tenant Arnold, in her motion, argued that (1) RHC "should document that all of the tenants [in Pennsylvania House] are proper parties" *fn4 and that (2) RHC should include the rent ceiling roll-back for the entire lighting system, rather than for a fraction thereof, because the 112 light fixtures are indivisible, comprising a lighting "system" for which installation had begun prematurely during the 60-day waiting period.

RHC denied both motions in a February 10, 1993 Order on Reconsideration and Other Relief. As to petitioner's motion, RHC reaffirmed its ruling that § 45-2520 (e) requires a housing provider to wait the entire 60-day period before proceeding in any way with a capital improvement. RHC concluded that there was sufficient evidence to support the hearing examiner's findings that petitioner had "completely installed ten light" within the 60-day period, and that although "the cooling tower was not completely installed before the 60-day deadline expired . . . the housing provider had sufficiently 'proceeded' with the capital improvement prior to the expiration of the 60-day deadline" to violate § 45-2520 (e).

As to the tenant's contentions on reconsideration, RHC - changing its earlier ruling, see (supra) note 4 - ruled that Betty Arnold was "the only proper tenant party in this case." RHC also disagreed with Arnold's second contention that the rent ceiling roll-back should incorporate an adjustment for all 112 light fixtures, not merely for the ten fixtures installed prematurely during the 60-day waiting period. RHC ruled that substantial evidence supported RACD's findings that distinguished between lighting fixtures installed, respectively, during and after the 60-day period. *fn5 Implicitly, therefore, RHC rejected Arnold's legal contention that the light fixtures comprised an undifferentiated "system." Both parties noted an appeal to this court.

II. Petitioner's (Housing Provider's) Appeal


Petitioner contends that it did not violate D.C. Code § 45-2520 (e) because that provision was not intended to limit a housing provider's right to a rent adjustment; it was intended merely to limit the time within which RACD may act on a capital improvement petition. We must "defer to an agency's interpretation of the statute which it administers . . . so long as that interpretation is reasonable and consistent with the statutory language." Boer v. Rental Hous. Comm'n, 564 A.2d 54, 57 (D.C. 1989). The agency's interpretation, therefore, is "controlling unless it ...

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