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Zanders v. Reid

September 17, 2009

BRENDA L. ZANDERS, APPELLANT,
v.
JOSEPH C. REID, RICHARD BAKER, AND SHIRLEY BAKER, APPELLEES.



Appeal from the Superior Court of the District of Columbia Civil Division (No. CA-8373-04) (Hon. Maurice A. Ross, Trial Judge).

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

Argued January 14, 2009

Before WASHINGTON, Chief Judge, GLICKMAN and BLACKBURNE-RIGSBY, Associate Judges.

Brenda Zanders sued Joseph Reid for breaking his promise to sell her the house in which she was living as his tenant and for violating her statutory right of first refusal by selling the house to Richard and Shirley Baker, and she sued the Bakers for interfering with her right to acquire the house by purchasing it themselves. The trial court struck all of Zanders's claims against the Bakers because she had failed to make rent payments into the court's registry as required by a protective order in a suit for possession they had filed against her in the Superior Court's Landlord and Tenant Branch. At trial, after the close of evidence, the court granted judgment as a matter of law to Reid on Zanders's claims of breach of contract and promissory estoppel, leaving only her statutory claim to go the jury. After the jury found for Zanders on that claim and awarded her $210,000 in damages, the court denied Zanders's motion to enforce the award on the ground that the statute did not authorize it. We conclude that each of these three rulings was error necessitating reversal.

I.

Viewing the evidence (much of which is not disputed) in the light most favorable to Zanders,*fn2 it appears that in 1997, while she and Joseph Reid were still maintaining their long-term romantic relationship, Zanders wanted to purchase a rowhouse located at 311 T Street, Northwest. She was unable to obtain a mortgage in her own name, however, because her credit was poor. To help her out, Reid agreed to an arrangement whereby he would obtain the mortgage for her in his name. The 1997 agreement between Zanders and Reid was an oral one, and never committed to writing, but Reid subsequently acknowledged it at trial. According to their agreement, Zanders would pay part of the down payment and make all the mortgage payments herself. She also committed to quit her job, return to school, and achieve a better credit rating within three years. After three years, the parties contemplated, Zanders would be able to obtain a mortgage in her own name, and Reid would transfer title to the house to her. (Reid agreed to add her name to the deed when he purchased the house, but that was never done.) If Zanders did not obtain financing at the end of the three years, it was agreed, Reid would sell the house and Zanders would receive the proceeds.

Pursuant to these arrangements, Reid secured the necessary mortgage and purchased the 311 T Street property, and Zanders moved into the house in October 1997. Zanders paid $11,500 of the $13,000 down payment. The mortgage was for approximately $106,000, of which $26,000 was designated to be used to renovate the premises. That amount proved insufficient for the extensive renovations needed, so in April 1998 Reid took out an additional mortgage, raising the total indebtedness to approximately $129,000. While the second mortgage was intended to cover construction costs, Zanders did not receive the money. Instead, Reid used it to recoup his share of the original down payment and to repay some debts. After the second mortgage, the monthly mortgage payment increased to $1,283. In addition to making those monthly payments, Zanders spent her own money on renovations.

In October 2000, when the three years were up, Zanders called Reid. By this time their romantic relationship had ended. Zanders, who had not been able to obtain a mortgage, thanked Reid for not selling the property. In response, Reid accused her of having "no integrity" (apparently for failing to secure financing) and told her that "the time had passed" for her to exercise her option under the original agreement. Nonetheless, Zanders continued living at the property and making the mortgage payments.

In June 2001, Reid took out a third mortgage on the property, raising the total indebtedness to $191,000. The nominal purpose of this third mortgage was to pay for repairing the house's sinking kitchen, but Reid allegedly kept all the proceeds and did not make the repairs. Reid was supposed to make the additional monthly mortgage payment of $560 himself. His payments often were late, resulting in sizable late fees.

At some point in the Spring of 2001, Zanders met with Reid to discuss the second refinancing. In the course of their meeting, Zanders later claimed, Reid agreed to give her an additional three years, i.e., until 2004, to obtain a mortgage in her name for the property, in which case he would transfer it to her in accordance with their original agreement. (Reid denied having made such an agreement.) Following their meeting, Zanders continued to reside in the house and to pay down the mortgage. Around October 2002, Zanders took over making the payments on the third mortgage that Reid had taken out. In 2003, she paid the property taxes to prevent the house from being sold at a tax sale after Reid refused to pay the taxes. Zanders also shouldered the costs of renovation and "general maintenance" after her 2001 meeting with Reid, including the expensive repair of the kitchen.

In June 2004, Zanders, believing herself able to secure the necessary financing, offered to purchase the house from Reid for $190,000. Reid rejected that offer, however, and demanded that Zanders pay $300,000. (The market value of the house had appreciated.) Zanders refused.

Reid then entered into a conditional agreement with his friends Richard and Shirley Baker to sell them the property for $350,000. To comply with the Tenant Opportunity to Purchase Act ("TOPA"),*fn3 Reid notified Zanders of her tenant's right of first refusal.*fn4 Despite Zanders's attempt to exercise that right, however, Reid sold the property to the Bakers for the agreed-upon price of $350,000. After the sale, Zanders continued to live in the premises.

II.

Two lawsuits ensued in Superior Court. First, in October 2004, Zanders filed a complaint (the "Civil Action") against both Reid and the Bakers. As later amended, the complaint alleged causes of action for breach of contract, promissory estoppel, fraud, interference with contractual relations, interference with business expectancy, and violation of Zanders's right of first refusal under TOPA. It sought monetary and equitable relief, ...


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