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Washington v. H.G. Smithy Company

March 15, 2001


Before Terry, Farrell, and Washington, Associate Judges.

The opinion of the court was delivered by: Terry, Associate Judge

Appeal from the Superior Court of the District of Columbia Hon. Steffen W. Graae, Trial Judge

Argued December 9, 1999

In this landlord-tenant proceeding, the tenant appeals from an order releasing to her former landlord's agent the funds she had deposited in the court registry, pursuant to a protective order, during the pendency of that landlord's action for possession. We affirm.


On March 9, 1990, appellant leased an apartment on Xenia Street, S.W. The building was owned by several members of the Carone family ("the Carones"), and H.G. Smithy Company ("Smithy") was the property manager. In May 1993 appellant filed a petition with the Rental Accommodation and Conversion Division ("RACD") of the Department of Consumer and Regulatory Affairs alleging that, before her tenancy began, the rent ceiling filed with the RACD for her unit had been improperly increased. A hearing on appellant's petition was held on October 25, 1993, at which Smithy argued that the petition was barred by the statute of limitations, D.C. Code § 45-2516 (e) (1996).

While the petition was pending before the RACD, Smithy sued appellant for possession of the apartment because she had failed to pay rent for the month of November 1993. On December 8, 1993, the parties asked the landlord and tenant court to enter a "Drayton stay" *fn1 of the court case, pending final resolution of the matter before the RACD. As part of the stay, appellant agreed to deposit each month into the court registry a sum equal to her monthly rent. By consent of the parties, the court entered a protective order requiring appellant to pay $497.00 into the registry on the fifth day of each month until the matter was resolved. Minor adjustments were made to the protective order payments from time to time thereafter, with appellant consistently making timely payments.

On April 19, 1994, the RACD dismissed appellant's rent ceiling petition, concluding that it was indeed barred by the statute of limitations. She appealed from that dismissal to the Rental Housing Commission ("RHC"). While the administrative appeal was pending before the RHC, appellant's counsel sent two letters to Smithy requesting repairs to the apartment. The first letter, dated August 2, 1994, stated that appellant was "frustrated by leaking and water damage in her living room and kitchen that she believes is related to plumbing for the apartment above hers." The second letter, dated September 15, 1994, asserted that appellant was "concerned because roaches have been entering her refrigerator" and "that she recently had a flood in her apartment [and] that her apartment needs to be painted and that there is loose paint."

On May 14, 1998, four years after appellant had filed her appeal, the RHC affirmed the dismissal of the rent ceiling action. On June 15 appellant filed a petition in this court for review of that decision. Shortly thereafter, in July 1998, the Carones sold the property to Ronald and Sharon Campbell and Gary and Bernadine Evans ("the new owners"). At the time of the sale, appellant had paid $24,042.00 into the registry, pursuant to the protective order, in lieu of rents due under the lease. After the property was sold, the new owners hired Delwin Realty Company to be the property manager, and Smithy ceased to perform that function. On August 10, 1998, Delwin Realty filed a new complaint for possession based upon appellant's failure to pay rent after the date of the sale.

On August 27 this court dismissed appellant's petition for review of the RHC decision for procedural reasons. Then, on October 2, Delwin Realty and appellant settled the landlord-tenant case by filing a praecipe requesting the court to release to Delwin from the registry the sum of $929.68, representing the pro-rated rent from the date of the sale through September 1998. As part of the settlement, Delwin Realty agreed to make various repairs to appellant's apartment.

On October 9, 1998, Smithy filed a "Motion to Release Funds from the Court Registry," asserting that it was "entitled to the funds . . . which represent rent due under the lease agreement between the parties from August 1, 1994, through July 9, 1998 (pro-rated for July 1998 following sale of the property by Owner to New Owner on July 9, 1998)." Appellant filed an opposition arguing that Smithy lacked standing to seek release of the funds because, as of July 9, 1998, Smithy was no longer the agent of the owner of the property and that, in any event, the settlement agreement between appellant and Delwin Realty barred any such release under the doctrine of res judicata. Smithy replied that it had standing because the outcome of Delwin's action for possession was irrelevant to the issue of who was entitled to receive funds previously paid into the court registry under the protective order. After a hearing on the motion, the trial court issued an order releasing all funds remaining in the registry to Smithy. The court concluded that Smithy had standing to seek disbursement of the funds in the registry, that the landlord-tenant action filed by Delwin Realty for rent accruing after the sale of the property and the subsequent settlement did not have res judicata effect on Smithy's claim, and that there was "no basis" for holding a hearing under McNeal v. Habib, 346 A.2d 508 (D.C. 1975). *fn2 On December 31, 1998, the clerk of the court released the funds in the registry to Smithy, pursuant to the court's order. Appellant's motions for a stay of that order were denied by the trial court and by this court.

On appeal, appellant renews her arguments that Smithy lacked standing to seek release of the funds after the property was sold and that the settlement between herself and Delwin Realty bars any payment to Smithy under the doctrine of res judicata. In addition, she contends that she was entitled to a McNeal hearing before the disbursement of the funds from the registry.


Appellant's argument that Smithy lacked standing to seek release of the funds from the registry is unpersuasive. At the time the property was sold in July 1998, appellant had paid into the registry the sum of $24,042.00 for rents properly due to Smithy, and ultimately to the landlords (the Carones), under the lease. *fn3 The fact that Smithy ceased to be the property manager after the property was sold had no effect on its pre-existing claims for rent, and hence to money paid into the registry in lieu of rent, at a time when Smithy was still the landlords' agent prior to the sale. See Cohen v. Food Town, Inc., 207 A.2d 122, 124 (D.C. 1965) ( "the landlord has the right to sue for each installment of rent as it becomes due"); Paregol v. Smith, 103 A.2d 576, 577 (D.C. 1954) ("[t]he landlord is not required to join his claim for rent with his claim for possession, but may make the claim ...

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