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Wallasey Tenants Association, Inc. v. Varner

February 16, 2006

WALLASEY TENANTS ASSOCIATION, INC., ET AL., APPELLANTS/CROSS-APPELLEES,
v.
CAROL SUE VARNER,*FN1 ET AL., APPELLEES/CROSS-APPELLANTS.



Appeals from the Superior Court of the District of Columbia (CA-10396-02) (Hon. James E. Boasberg, Trial Judge).

The opinion of the court was delivered by: Washington, Chief Judge

Argued October 26, 2004

Before WASHINGTON, Chief Judge,*fn2 and SCHWELB and FARRELL, Associate Judges.

Appellant Wallasey Tenants Association ("the Tenants") appeals from the trial court's order granting summary judgment to appellees Kenneth Fairbairn and Fairbairn Properties -- 2426 19th Street N.W., L.L.C. (referred to jointly as the "Fairbairn Parties") and denying Tenants' motion for summary judgment in a suit arising from Mr. Fairbairn's alleged violation of the Rental Housing Conversion and Sale Act, D.C. Code § 42-3401.01 et seq. (2001) ("the Act"). The Tenants contend that the trial court erroneously concluded that Mr. Fairbairn's transfer of property to a limited-liability company controlled by Mr. Fairbairn himself was not a sale that triggered the Tenants' statutory right of first refusal under § 42-3404.02 (a) (2001). In a separate action, the Fairbairn Parties appeal from the trial court's order denying their request for attorneys' fees, pursuant to D.C. Code § 42-3405.03 (2001). We disagree, and affirm both decisions of the trial court.

I.

From April 2, 1962, until December 17, 1999, Kenneth Fairbairn was the sole owner of a seventeen-unit apartment building, the Wallasey, located at 2426 19th Street, N.W., in the District of Columbia. Fairbairn Properties -- 2426 19th St., N.W., L.L.C. ("19th St. LLC") is a District of Columbia corporation that is 99% owned by Mr. Fairbairn. Fairbairn Properties, L.L.C., a Virginia corporation, owns the remaining 1% of the 19th St. LLC. Mr. Fairbairn is the sole member and owner of Fairbairn Properties, L.L.C.

On December 17, 1999, Mr. Fairbairn transferred ownership of the Wallasey to the 19th St. LLC. Specifically, Mr. Fairbairn transferred a 100% fee simple interest in the Wallasey to the 19th St. LLC for "good and valuable consideration" by special warranty deed executed December 17, 1999. The transaction between Mr. Fairbairn and the 19th St. LLC was made without notice to the Tenants and without giving them a right of first refusal. The transfer of title was recorded in the D.C. Recorder of Deeds office on December 20, 1999. Since 1999, the 19th St. LLC has been the sole owner and title holder of the Wallasey.

In autumn 2002, while searching District of Columbia land records on the internet, the Tenants discovered that the Wallasey had been transferred to the 19th St. LLC. Tenants sent notice to Mr. Fairbairn requesting exercise of the right of first refusal pursuant to D.C. Code § 42-3404.02 (a). Mr. Fairbairn, through counsel, informed the Tenants that the right of first refusal was not available because the transfer of the Wallasey was not a sale. Tenants thereafter brought suit.

Tenants allege that Mr. Fairbairn received consideration of value in exchange for the Wallasey, and thus this transfer to a distinct legal entity is appropriately characterized as a sale triggering Tenants' opportunity of first refusal. The Fairbairn Parties admit that transfer of the Wallasey to the 19th St. LLC resulted in benefits to Mr. Fairbairn in the form of limited personal liability and ease in estate planning. The Fairbairn Parties maintain, however, that regardless of benefits received, the transfer of the Wallasey was not a sale and that Tenants' statutory rights of first refusal were not activated.

Both the Fairbairn Parties and the Tenants filed motions for summary judgment and requested that the trial court decide the issue as a matter of law, without further discovery or trial. After extensive briefing, the trial court granted summary judgment in favor of the Fairbairn Parties and held the transfer was not a "sale" under the Act. In light of their victory, the Fairbairn Parties moved for attorneys' fees pursuant to D.C. Code § 42-3205.03. The trial court denied that request. Both parties filed timely appeals.

II.

Summary judgment is appropriate if, when viewing the record in the light most favorable to the non-moving party, there are no genuine issues of material facts in dispute, and the moving party is entitled to judgment as a matter of law. Super. Ct. Civ. R. 56 (c); see also Abdullah v. Roach, 668 A.2d 801, 804 (D.C. 1995).In reviewing summary judgment decisions, we conduct an independent review of the record and apply the same standard as the trial court in considering whether the motion was properly granted. See Burt v. First Am. Bank, 490 A.2d 182, 184-85 (D.C. 1985). This court will affirm the trial court's grant of summary judgment if the "'pleadings, depositions, answers to interrogatories, and admissions on file together with the affidavits,'" support the conclusion that there was no genuine issue of material fact. Urban Masonry Corp. v. N&N Contractors, Inc., 676 A.2d 26, 30 (D.C. 1996) (quoting Byrd v. Allstate Ins. Co., 622 A.2d 691, 693 (D.C. 1993)).

The Tenant Opportunity to Purchase Act, D.C. Code § 42-3404.02 et seq., provides that:

Before an owner of a housing accommodation may sell the accommodation, or issue a notice of intent to recover possession, or notice to vacate, for purposes of demolition or discontinuance for housing use, the owner shall give the tenant an opportunity to purchase the ...


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