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Euclid Street, LLC v. District of Columbia

April 12, 2012

EUCLID STREET, LLC, APPELLANT,
v.
DISTRICT OF COLUMBIA WATER AND SEWER AUTHORITY, APPELLEE.



Appeal from the Superior Court of the District of Columbia (CAB-6780-08) (Hon. Brian Holeman, Trial Judge)

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

Argued May 26, 2010

Before BLACKBURNE-RIGSBY, Associate Judge, RUIZ, Associate Judge, Retired,*fn1 and NEBEKER, Senior Judge.

RUIZ, Associate Judge, Retired: Euclid Street, L.L.C. ("Euclid Street") appeals the dismissal of its complaint against the District of Columbia Water and Sewer Authority ("WASA") seeking declaratory and injunctive relief. The issue presented in this case is whether WASA has the authority to hold the owner of a building responsible for paying a tenant's delinquent water services account. Because the applicable statute and regulations establish that the obligation to satisfy outstanding water service fees runs with the property where the water was consumed, we conclude that WASA is permitted to bill the owner of a building if a tenant consumes water, is billed appropriately, but fails to pay. We, therefore, affirm the dismissal of appellant's complaint.

I. Facts

Euclid Street owns a multi-unit apartment building located at 1460 Euclid Street, N.W. On March 8, 2000, Euclid Street requested WASA's permission to install water meters in each apartment so that each tenant living in the building would be billed directly for their water and sewer use.*fn2 WASA agreed and began to bill tenants directly based on readings from water meters that Euclid Street installed in each apartment.

After several tenants failed to pay their water bills in full, WASA notified Euclid Street that there were delinquent accounts in the building and that Euclid Street would be held liable for the overdue amounts. Euclid Street refused to pay, arguing that its obligation to WASA had ended once WASA agreed to the individual metering and had billed the tenants directly for the water that was provided to each apartment. After WASA filed a lien with the Recorder of Deeds against the property pursuant to D.C. Code § 34-2407.02 (2001), Euclid Street filed a complaint in Superior Court alleging that it had no obligation to satisfy the tenants' delinquent accounts and that the lien exceeded WASA's statutory authority and violated the Due Process and Takings Clauses of the Constitution and 42 U.S.C. § 1983. The Superior Court (Judge Retchin) dismissed Euclid Street's complaint for failure to exhaust administrative remedies before WASA. Not long afterwards, Euclid Street and WASA filed a praecipe in which Euclid Street agreed to dismiss its pending appeal of the Superior Court's dismissal of the complaint, and to pay the tenants' outstanding water service fees. In exchange, WASA agreed to remove all liens against 1460 Euclid Street.

Euclid Street's tenants, however, continued to fall into arrears with their water bills. WASA again attempted to collect the overdue amounts from Euclid Street, and Euclid Street again refused to pay. WASA filed another lien against 1460 Euclid Street. This time (perhaps because of the court's prior direction to exhaust administrative remedies), Euclid Street filed an administrative hearing petition with WASA. Euclid Street's petition listed the issues to be considered as follows:

1. Whether Euclid Street is liable to WASA for the delinquent WASA accounts of the tenants.

2. Whether WASA is equitably estopped from maintaining or placing liens on 1460 Euclid Street because of delinquent tenant accounts.

3. Whether new tenants are liable to WASA for the delinquent accounts of former tenants.

4. Whether WASA must remove all liens it has recorded against [1]460 Euclid Street because of delinquent tenant accounts.

5. Whether WASA is prohibited from recording any future liens against 1460 Euclid Street because of delinquent tenant accounts.

6. Whether WASA's policy of placing and maintaining liens on [1]460 Euclid Street because of delinquent tenant accounts violates the Due Process Clause of the Constitution.

7. Whether WASA's conduct of placing and maintaining liens on [1]460 Euclid Street because of delinquent tenant accounts violates the Takings Clause of the Constitution.

The petition did not specify what form of relief Euclid Street was requesting and did not designate which water bills Euclid Street contested. Following a brief hearing, which did not include the presentation of any evidence, the Hearing Officer dismissed Euclid Street's petition by written order. In the order of dismissal, the Hearing Officer explained:

It is clear that neither party to the hearing was able to identify the specific bill or bills that the customer believed were inaccurate, since that is not why this customer was seeking a hearing. . . . [T]his hearing was not about the accuracy of the bills, but rather about the method that WASA chose to try to collect unpaid bills.

After analyzing the regulations that establish the procedures for contesting a water bill, set forth in Chapter 4 of Title 21 to the Code of D.C. Municipal Regulations, the Hearing Officer concluded that "[t]he issues raised by the customer in this case are well beyond the limitations ...


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