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Dorchester House Associates Limited Partnership v. District of Columbia Rental Housing Commission

December 28, 2006

DORCHESTER HOUSE ASSOCIATES LIMITED PARTNERSHIP, PETITIONER,
v.
DISTRICT OF COLUMBIA RENTAL HOUSING COMMISSION, RESPONDENT.



Petitions for Review of Decisions of the District of Columbia Rental Housing Commission (CI20-767-04).

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

Argued October 25, 2006

Before FISHER and THOMPSON, Associate Judges, and NEWMAN, Senior Judge.

Dorchester House Associates Limited Partnership ("DHA"), owner of a 394-unit apartment building, filed a capital improvement petition requesting an increase in the rent ceiling. Certain tenants of the building opposed the petition. After a hearing, the Administrative Law Judge granted DHA's motion to dismiss its petition without prejudice. See Super. Ct. Civ. R. 41 (a)(2). The tenants appealed to the Rental Housing Commission ("RHC"), which ruled that the matter should have been dismissed with prejudice. See Super. Ct. Civ. R. 41 (b). The RHC later awarded attorney's fees to the tenants because they were prevailing parties. See D.C. Code § 42-3509.02 (2001).DHA then petitioned this court to review both orders. We reverse and remand for further proceedings.

I. Factual and Procedural Background

On November 2, 2001, DHA filed capital improvement petition No. 20,767 pursuant to D.C. Code § 42-3502.10 (a) (2001), formerly D.C. Code § 45-2520 (b) (1981). The petition sought authorization to recover from the tenants the cost of installing a fire suppression system, including a standpipe and fire alarm generator. DHA represented that the total cost of the improvements would require a rent ceiling increase of $16.00 per unit.

Administrative Law Judge Henry McCoy held a hearing on July 26, 2002. For the petition to be approved, DHA had to show, among other things, that required governmental permits and approvals had been secured. D.C. Code § 42-3502.10 (b) (2001); Columbia Realty Venture v. District of Columbia Rental Housing Comm'n, 590 A.2d 1043, 1045-46 (D.C. 1991). The tenants moved to dismiss the petition because DHA had not submitted electricity permits, other permits regarding demolition and construction, a current housing license, or occupancy and professional licenses from the District of Columbia Real Estate Commission. The ALJ took this motion under advisement and allowed the record to remain open until August 9, 2002, for both parties to submit additional materials and proposed decisions.

On August 9, DHA submitted copies of its current housing license and the property manager's professional license. It had not yet been able to secure the necessary permits for the fire alarm generator.On that same day DHA moved to withdraw its capital improvement petition without prejudice, asserting it was "deeply concerned that this case will become bogged down in a procedural quagmire which will be as prejudicial to its interests as to that of the tenants . . . ."*fn1 Alternatively, DHA submitted a proposed decision that would have granted the capital improvement petition with respect to installing the standpipe but, because of the missing permits, would have denied the petition with respect to the fire alarm generator. This alternative request would have required a rent ceiling increase of approximately $12.00 per unit. The tenants opposed DHA's motion to withdraw.

The ALJ granted DHA's motion to withdraw, relying upon Rule 41 (a)(2),*fn2 which governs voluntary dismissals by order of a court, and 14 DCMR § 3824.2, which governs the withdrawal of appeals to the Rental Housing Commission.Section 3824.2 directs the RHC to "review all motions to withdraw to ensure that the interests of all parties are protected." The ALJ concluded that the interests of all parties were protected here.Applying Rule 41 (a)(2) as construed by Thoubboron v. Ford Motor Co., 624 A.2d 1210, 1213 (D.C. 1993), the ALJ granted DHA's motion to withdraw without prejudice because the tenants had not shown they would suffer "a real and substantial detriment" if the motion were granted.

The RHC ruled that the ALJ had abused his discretion by applying 14 DCMR § 3824.2, because that rule is not applicable to proceedings before the Rent Administrator. Rule 41 may be applied in such proceedings,*fn3 but the RHC concluded that ALJ McCoy had not properly applied Rule 41 (a), governing voluntary dismissals.*fn4 Instead, the RHC concluded that Rule 41 (b), dealing with involuntary dismissals, applied because DHA had "failed to prosecute" its case when it was unable to produce the required governmental permits.*fn5 Additionally, the RHC (mistakenly) believed that DHA had already completed the capital improvement work without the proper permits, so the tenants had suffered "real and substantial detriment." See Thoubboron, 624 A.2d at 1213. Therefore, the RHC directed the ALJ "to enter an order of involuntary dismissal . . . which operates as an adjudication upon the merits."

DHA filed a motion for reconsideration, pointing out the RHC's mistake in believing the work had already been done. The RHC corrected that error but concluded the petition still should be dismissed with prejudice. DHA had failed to submit the permits required by D.C. Code § 42-3502.10 (b)(3), and the tenants would suffer legal detriment if they remained subject to another hearing on the same petition they had already defeated. Additionally, the RHC held that dismissing the petition without prejudice after the ALJ had conducted a hearing on the merits was error according to Cohen v. District of Columbia Rental Housing Comm'n, 496 A.2d 603 (D.C. 1985).

II. Standard of Review

Our standard for reviewing an agency's decision is prescribed in the District of Columbia Administrative Procedure Act, D.C. Code § 2-510 (a)(3) (2001), formerly D.C. Code § 1-1510 (a)(3) (1981). Recognizing the agency's expertise, we generally give great deference when it is interpreting its own regulations or the statutes it administers. E.g., Columbia Realty Venture v. District of Columbia Rental Housing Comm'n, 590 A.2d at 1046. However, we owe no deference when an agency interprets the decisions or rules of the courts, because it has no special expertise in these matters. E.g., Cafritz Co. v. District of Columbia Rental Housing Comm'n, 615 A.2d 222, 228 (D.C. 1992) (no deference given to RHC's interpretation of this court's decisions); Saah v. District of Columbia Bd. of Zoning Adjustment, 433 A.2d 1114, 1116 (D.C. 1981) (when agency's decision rests on a matter of law, the reviewing court has the greater expertise and the agency is accorded less deference).

Therefore, we owe no deference to RHC's interpretations of Rule 41 or our decision in Cohen ...


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