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Porter Novelli, Inc. v. Bender

February 20, 2003

PORTER NOVELLI, INC., APPELLANT/CROSS-APPELLEE,
v.
HOWARD BENDER, GENERAL PARTNER FOR JACK I. BENDER & SONS, APPELLEE/CROSS-APPELLANT.
HOWARD BENDER, GENERAL PARTNER FOR JACK I. BENDER & SONS, APPELLANT/CROSS-APPELLEE,
v.
PORTER NOVELLI, INC., APPELLEE/CROSS-APPELLANT.



Appeals from the Superior Court of the District of Columbia (LT-530-00) (Hon. Judith Bartnoff, Trial Judge)

Before Terry and Farrell, Associate Judges, and Ferren, Senior Judge.

The opinion of the court was delivered by: Ferren, Senior Judge

Argued January 8, 2003

In this dispute between Bender (a landlord) and Porter Novelli (a commercial subtenant), the central question is whether the subtenant - in holding over for more than four months after the lease (and sublease) expired at the end of December 1999 - is liable to the landlord for double or triple rent during the holdover period.

I.

Landlord filed an action for possession and motion for summary judgment in the landlord-tenant court, which stayed eviction and issued a protective order obliging subtenant to pay double rent into the court registry - reflecting the holdover penalty prescribed in the lease - pending resolution of the matter. Subtenant then offered to consent to judgment of possession at double rent if landlord consented to a stay until May 15, 2000. Landlord countered, among other things, with an offer of the requested stay at triple rent. Subtenant agreed, and the parties, after reciting in court the general terms of their agreement, entered a consent judgment - conditioned, however, on reduction of the agreement to a signed written document.

Negotiations broke down; no written agreement was executed. Subtenant moved to pay triple rent (and other sums) into the court registry while remaining in possession pending final outcome. Landlord, to the contrary, moved for vacation of the stay of eviction, for entry of its unopposed motion for summary judgment, and thus for immediate possession. Concluding that the parties had not finalized the oral holdover agreement, as required under the consent judgment, a second landlord-tenant judge granted landlord's motion and entered a judgment for possession, implicitly incorporating the lease's award of double rent during holdover.

Subtenant immediately filed an appeal in this court, premised on the validity of the triple-rent holdover agreement, and sought an emergency stay, which this court granted. Our order, more specifically, required payment of triple rent - plus a $12,000 attorney's fee and a $400,000 security deposit to assure vacation of the premises by May 15 - into the trial court registry pending resolution of the appeal.

In March 2000, landlord - presumably anticipating that the appeal process would thwart its efforts for early repossession, and thus hoping for the triple rent the subtenant had offered - moved to dismiss the appeal as moot, conceding enforceability of the holdover agreement. Subtenant opposed on the ground that it then would be exposed to an unconditional judgment of possession upon lifting of this court's stay. In April, this court denied landlord's motion without prejudice to the parties' filing a "fully executed settlement agreement addressing all issues, including the status of liquidated damages pending [Subtenant's] vacating the premises on May 15, 2000."

Subtenant left the premises by May 8, 2000, whereupon it moved to dismiss the appeal as moot. Landlord did not oppose, and this court granted subtenant's motion.

Both parties then returned to landlord-tenant court and moved for release of funds in the court registry. In doing so Landlord - having prevailed initially on the ground that the lease, not the contested holdover agreement, governed the dispute - now claimed that Subtenant had been right after all, and thus that subtenant owed triple, not double, rent for the holdover period. Subtenant, to the contrary - having premised its appeal and request for stay on the validity of the holdover agreement - now claimed that Landlord had been right after all, and thus that the only law of the case, adjudicated in landlord-tenant court by reference to the lease, required double, not triple, rent. After a hearing, a third landlord- tenant judge, agreeing with subtenant that the law of the case (announced by the previous judge) was premised on rejection of the holdover agreement, awarded landlord the double rent due under the lease.

In this second appeal subtenant, in support of the landlord-tenant court ruling, argues that landlord not only is bound by the law of the case - which landlord itself helped establish - but also cannot claim prejudice from receipt of the double rent due under a lease that landlord had signed and accepted. Landlord, on the other hand, notes that the law of the case was twofold, embracing landlord's right to both immediate possession and double rent during holdover; that subtenant trumped that dual right by obtaining a stay in this court premised on landlord's entitlement to triple rent under an agreement forestalling possession; that landlord otherwise could have taken over the premises as it desired (and the judge had ordered) well before May 8, 2000; and thus that subtenant, having received the benefit of a stay the landlord-tenant court itself rejected, is estopped to deny landlord's right to triple rent as the price for its representation to this court that led to the stay of eviction until subtenant was ready to vacate the premises.

So which law of the case governs - the real-world impact of this court's stay (frustrating landlord's dual right to immediate occupancy and double rent) premised on subtenant's initial representation that the holdover agreement for triple rent was valid? Or the trial court's award of double rent based on landlord's initial premise, in ...


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