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3511 13th Street, LLC v. Lewis

April 22, 2010

3511 13TH STREET, LLC, APPELLANT,
v.
SONNYTHIA LEWIS, ET AL., APPELLEES.



Appeal from the Superior Court of the District of Columbia, (CAB5320-03) (Hon. Maurice A. Ross, Trial Judge).

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

Argued December 2, 2009

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

This case arises out of a contract to purchase an apartment building in the District of Columbia. Appellant 3511 13th Street, LLC, and its sole owner and managing member, Steven Madeoy, sued for specific performance of its contract with appellee Sonnythia Lewis. Mr. Madeoy seeks reversal of the trial court's order entering judgment denying him specific performance of the contract pursuant to which Ms. Lewis had agreed to sell him an apartment building located at 3511 13th Street, NW, Washington, D.C. We affirm.

I.

Madeoy, as the managing member of 3511 13th Street, LLC, entered into a contract with Lewis on January 4, 2003, to purchase the property for the price of one million, three hundred thousand dollars ($1,300,000). The contract required that Madeoy provide an earnest money deposit of twenty-five thousand dollars ($25,000) and that settlement would take place on January 16, 2003. At trial, Madeoy testified that he had supplied a check in the amount of $25,000 to one Mark Tillmon for that purpose. However, he could not recall any details concerning the writing of the check or his furnishing it to Mr. Tillmon. Tillmon was a self-described consultant finder (or "bird dog") for Madeoy, and had been locating properties for him for several years. In his sworn deposition, Tillmon testified that he never deposited the check, lost it only a few days after receiving it, and never informed Madeoy of its loss. Tillmon did not sign the contract in the appropriate space to indicate that he had received the check. The trial court found that Madeoy did not make the deposit.

The contract provided that if the title was not "good of record and in fact" the deposit was "to be returned and sale declared off at the option of the purchaser" unless the title defects could "readily be remedied by legal action" which "must be taken promptly by and at the seller's expense." Prior to the date scheduled for settlement, Madeoy was told by the settlement officer, Benjamin Soto, that there was a cloud on the title, that is, a previous contract between Lewis and one Arthur Coleman. Accordingly, Madeoy did not go forward with settlement. The trial court recited that Madeoy "allegedly" offered Coleman $50,000 to gain formal release of the contract, and that the offer was rejected, but made no finding on that matter. Madeoy never demanded by correspondence or otherwise that Lewis take legal or other action to clear the title.

In early June 2003, Madeoy was informed of a contract between Lewis and Ms. Nuyen for the sale of the property for one million five hundred forty-five thousand dollars ($1,545,000). Nuyen asked Madeoy to provide proof that he had tendered the earnest money deposit required by the Lewis/Madeoy contract, but he did not do so. Madeoy attempted to forestall the settlement on the Lewis/Nuyen contract by speaking with the settlement attorney for that contract and asserting to him that there were problems with the property, including that the utility and tax bills had not been paid and the tenants' rights had not been satisfied. All of the problems raised by Madeoy were found by the court to be groundless. Lewis filed for bankruptcy in an attempt to prevent foreclosure on the property. In the hope of purchasing the property at the foreclosure sale scheduled to take place on July 1, 2003, Madeoy not only attempted to derail the Lewis/Nuyen contract, but also testified for the mortgage holders at a bankruptcy "lift stay" hearing on May 8, 2003. Lewis and Nuyen proceeded to settlement on June 30. Madeoy filed this suit on the same day.

II.

This case comes before this court for the second time. See 3511 13th Street Tenants' Ass'n. v 3511 13th Street, N.W. Residences, LLC, 922 A.2d 439 (D.C. 2007). The litigation began with three related actions in Superior Court: (1) a suit for specific performance by Madeoy; (2) a counter-suit by Lewis and Nuyen against Madeoy alleging that Madeoy had tortiously interfered with their contract for sale; and (3) an action to rescind the Lewis/Nuyen contract filed by a tenants' association representing tenants of the building, alleging that they had not been given notice of the sale and an opportunity to purchase their units as required by the Tenant Opportunity to Purchase Act (TOPA), D.C. Code §§ 42-3404.02, -3404.13 (2001). The trial court granted summary judgment against Madeoy in his suit for specific performance, concluding that his alleged contract was not supported by valid consideration. The other two actions were tried to a jury. The judge dismissed the counter-suit against Madeoy on his motion for judgment as a matter of law, and the jury rejected the tenants' claim that they had not been given the required statutory notice. See 3511 13th Street Tenants' Ass'n, 922 A.2d at 440-41.

Madeoy and the tenants' association appealed the trial court's judgment in their respective actions. This court affirmed the jury verdict against the tenants' association, but reversed the trial judge's ruling that as a matter of law the contract between Madeoy and Lewis lacked valid consideration. We held that there existed genuine issues of material fact about whether Madeoy intended to be bound by his promise to buy the property and whether his alleged failure to deliver the earnest money deposit constituted a breach of the contract excusing Lewis from further performance. See id. at 443-44.

On remand, the trial court denied Madeoy's request for specific performance. The court decided not to exercise its discretion to order specific performance because (1) the plaintiff did not prove he was ready and willing to perform the contract with Lewis; (2) the equities did not weigh in favor of the plaintiff; and (3) the plaintiff's failure to provide the required earnest money deposit to Lewis was a material breach of the contract. The court also concluded that appellant's intentional delay in seeking enforcement of the contract with Lewis not only evidenced that appellant was not willing to go forward with the contract, but also represented laches.

In denying Madeoy's claim for specific performance, the court focused on his failure either to tender the earnest money deposit or to require Lewis to take action to clear the title, and on his attempts to obtain the property through a foreclosure sale rather than a purchase from Lewis, which included his effort to derail the contract ...


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