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Welsh v. McNeil

Court of Appeals of Columbia District

June 29, 2017

Wilfred Welsh, Appellant/Cross-Appellee,
v.
Beverly McNeil and Alvin Elliott, Appellees/Cross-Appellants.

          Argued May 12, 2016

         Appeals from the Superior Court of the District of Columbia (CAB-429-14) (Hon. John M. Campbell, Trial Judge)

          Michael C. Forster for appellant/cross-appellee.

          Steven G. Polin for appellees/cross-appellants.

          Before Glickman, Beckwith, and McLeese, Associate Judges.

          OPINION

          PER CURIAM.

         Wilfred Welsh, a member of the Chaplin Woods Homeowners Association ("HOA"), sued fellow HOA members Beverly McNeil and Alvin Elliott (the "McNeils") on the ground that they had leased out their home in violation of the HOA's bylaws. The McNeils brought counterclaims under the Federal Fair Housing Act[1] and the District of Columbia Human Rights Act.[2] The trial court granted summary judgment against Mr. Welsh on the ground that he lacked standing and against the McNeils on the merits. Mr. Welsh and the McNeils now appeal these respective rulings.

         As to Mr. Welsh's claims, we reverse the judgment of the trial court for the reasons stated in Judge Beckwith's opinion. As to the McNeils' counterclaims, we reverse the trial court's judgment for the reasons stated in Judge Glickman's opinion. The case is remanded for further proceedings consistent with these opinions.

          Glickman, Associate Judge, with whom Beckwith and McLeese, Associate Judges, join in parts I, II, and III.B, concurring in part and dissenting in part:

         These appeals are from the resolution by summary judgment of a dispute between members of the Chaplin Woods Homeowners Association. Members Beverly McNeil and Alvin Elliott (the "McNeils") rented their townhouse to a group of recovering alcoholics and substance abusers as a residence. The terms of the rental agreement did not meet certain requirements in the Homeowners Association's Bylaws. Member Wilfred Welsh ("Welsh") sued the McNeils in Superior Court for leasing in violation of the Bylaws and without the approval of the Association's Board of Directors. The Homeowners Association itself did not join in his complaint and has not been a party to this litigation. The McNeils counterclaimed that Welsh was violating the Federal Fair Housing Act and the District of Columbia Human Rights Act by opposing their request for a reasonable accommodation - Board approval of their rental agreement - that would allow them to provide a dwelling to persons with disabilities. Welsh and the McNeils each moved for summary judgment on the other's claims. The trial judge, ruling that neither Welsh nor the McNeils had standing to maintain their claims, granted both motions.

         Welsh rested his standing to sue the McNeils on a provision in the Bylaws of the Homeowners Association giving individual members the "same rights as the Association" to enforce the Bylaws. After he initiated his suit, however, the Association, through the actions of its Board of Directors and its President, approved the McNeils' lease. Welsh contends this approval was itself improper under the Bylaws. Even if that is so, however, I agree with the trial judge that the approval operated to deprive Welsh of any standing he had to pursue the claim he asserted against the McNeils; under the circumstances, as I explain below, the Bylaw provision on which Welsh relies for standing is inapplicable. I would therefore affirm the award of summary judgment in their favor on Welsh's complaint.

         As to the counterclaims, the trial judge ruled that Welsh could not be liable to the McNeils under the Fair Housing and Human Rights Acts because "as a single board member, [he] does not have the power, on his own accord, to grant or deny a reasonable accommodation" to them. We, as a panel, conclude that this was an erroneous basis on which to find either that the McNeils lacked standing or that they could not prevail on the merits of their fair housing claims against Welsh. We therefore reverse the award of summary judgment to Welsh on the McNeils' counterclaims.

         I.

         Chaplin Woods Townhomes is a residential community situated on Texas Avenue in the Southeast quadrant of the District of Columbia. Welsh and the McNeils own homes in this community. All Chaplin Woods homeowners are members of the Homeowners Association and governed by its Bylaws. The Association is a District of Columbia corporation. As its Bylaws set forth, a five-member Board of Directors is vested with "all of the powers and duties necessary for the administration of the affairs of the Association and may do all acts that are not prohibited by these Bylaws." Welsh was a member of the Board; at times pertinent to this case, he served as its Secretary. The Board elects the officers of the Association. The President presides at all meetings of the Association and the Board of Directors and has "all of the general powers and duties which are incident to the chief executive of a stock corporation organized under the Business Corporation Act of the District of Columbia."

         The Bylaws permit members to lease their townhouses subject to certain conditions and Board approval. The conditions include a rule against occupation of the premises by anyone not named in the lease and a prohibition of subletting. However, by a two-thirds vote, the Board of Directors may approve leases that do not meet those or other Bylaw requirements. If the Board does not approve a lease, it "may pursue the legal remedies at its disposal in order to prevent the unauthorized use of the premises."

         In general, "the Association, acting through its Board of Directors, " may seek legal relief for any violation of the Bylaws. An "aggrieved Member" of the Homeowners Association also is authorized by the Bylaws to seek such relief "if appropriate." The Bylaws further state that "[a]ny individual Member shall have the same rights as the Association to enforce any provision of these Bylaws except the right to collect delinquent assessments."

         In April 2009, the McNeils started renting their townhouse in Chaplin Woods to an entity identified as "Oxford House - Texas Avenue." This entity was an unincorporated association of approximately seven women who were recovering alcoholics and drug addicts. The purpose of the lease was to provide them with sober, supportive, single-family housing in accordance with the tenets of a recovery program sponsored by a national organization known as Oxford House, Inc.[3] The lease was for two years. It was renewed for another two-year term in June 2011.

         The two leases did not comply with the Homeowners Association Bylaws, chiefly because they did not name the persons who would occupy the premises. The Board of Directors did not approve the leases. However, neither the Board nor Welsh took legal action to abate the unapproved tenancy while either lease was in effect.

         In May of 2013, as the second lease was soon to expire, the President of the Board of Directors informed the McNeils in writing that they would have to submit a lease that complied with the Bylaws. The following month, the General Counsel of Oxford House, Inc., wrote a letter to the Board. Stating that he was writing on behalf of both the McNeils and the residents of Oxford House - Texas Avenue, he requested that the Board waive the Bylaw requirements at issue as a reasonable accommodation mandated by the Fair Housing Act to afford persons recovering from substance abuse who could not live independently or with their families "an equal opportunity to use and enjoy a single [-] family dwelling of their choice." The Board took no immediate action in response to this letter.

         The McNeils proceeded to enter into another lease with Oxford House -Texas Avenue. They submitted this lease to the Board for its approval in August 2013. The Board rejected the lease for being non-compliant with the Bylaws. This time, however, the Board turned the matter over to the Homeowners Association's attorney. In September 2013, that attorney sent the McNeils a "Notice of Violation - Cease and Desist" letter asserting they were violating the Bylaws by subleasing their townhouse and allowing persons not named in the lease to occupy it.[4] The letter called upon the McNeils to cure this violation within ten days and warned that their failure to cease subletting the property "may result in the Association exercising its available remedies at law, " including removal of the tenants from the premises, the imposition of fines, the filing of a civil lawsuit, and other possible sanctions.

         The General Counsel of Oxford House, Inc., answered the cease-and-desist notice on the McNeils' behalf. Citing his June 2013 request for a reasonable accommodation, he charged that the Association's conduct up to this point had violated the fair housing rights of both the McNeils and the Oxford House - Texas Avenue residents. He warned that if the Association did not grant a reasonable accommodation to enable them to proceed with their lease, the McNeils would apply for a court order enjoining enforcement of the Bylaws against them.

         The Association's attorney responded that he had not known of the McNeils' request for a reasonable accommodation and would review it with the Board of Directors. On January 9, 2014, he sent the Board a letter advising that the accommodation sought by the McNeils would be "appropriate" and "required" under the Fair Housing Act and recommending that the full Board of Directors meet to discuss the issue.[5]

         Two weeks later, on January 24, 2014, Welsh filed his complaint against the McNeils to enjoin them from leasing their townhouse in violation of the Homeowners Association Bylaws.[6] The Board of Directors did not authorize this action and the Association did not participate in it. Welsh brought the suit in his own name, citing the Bylaw provisions empowering individual members of the Association to enforce the Bylaws. In their answer, the McNeils asserted that Welsh lacked standing to maintain the action. They also counterclaimed, charging Welsh with discriminating against the residents of Oxford House - Texas Avenue in violation of the Fair Housing and Human Rights Acts, principally by ignoring, opposing, and obstructing their request for a reasonable accommodation. The McNeils claimed, among other things, that when they attempted to educate Welsh about their tenants' need for an accommodation, he refused to accept their explanations, and that he impeded and delayed consideration of their request for a reasonable accommodation by failing to bring the June 2013 letter from the General Counsel of Oxford House, Inc., to the attention of the Association's attorney (as allegedly it was Welsh's responsibility to do in his capacity as the Board's Secretary).[7] The McNeils further claimed that Welsh had retaliated against them in contravention of the Fair Housing and Human Rights Acts by threatening and thereafter pursuing legal action against them for not complying with the Bylaws. In response to the counterclaims, Welsh denied that his actions were discriminatory or retaliatory. He claimed to have acted solely in the belief that enforcement of the Bylaws is necessary to protect important legitimate interests of the Homeowners Association.

         On April 28, 2014, shortly after the McNeils responded to the complaint, the President of the Homeowners Association sent them a letter on Association stationery. The letter advised the McNeils that the Board of Directors had voted on March 27, 2014, on a motion to approve their lease with Oxford House - Texas Avenue. According to the letter, four of the five Directors were present at the meeting, including Welsh, and "[t]he vote was 2 yes, 1 nay and 1 excused."[8]"Therefore, " the letter concluded, "the lease was approved[.]" So far as the record indicates, the Board of Directors has never disavowed this letter from its presiding officer. The Association has not sought to intervene in the present lawsuit to enforce the Bylaws against the McNeils' lease.

         After they received the President's letter, the McNeils requested that Welsh dismiss his complaint. He refused to do so, taking the position that the Board vote on March 27 did not constitute an approval of the lease because only two Directors voted for approval. Welsh claimed that because there were four Directors present (though only three voted), a valid approval would have required three affirmative votes under a Bylaw provision stating that "the vote of a majority of the Directors present at a meeting at which a quorum is present shall constitute the decision of the Board of Directors" (emphasis added).[9] Welsh also claimed that the Board vote was ineffective because the Board previously had disapproved the lease and because the McNeils did not obtain the Board's approval of it before the lease term commenced. The McNeils contend that Welsh's continuing prosecution of his suit against them after the Board's approval of their lease constitutes further retaliation in violation of the fair housing laws. Welsh denies this.

         The parties eventually filed motions for summary judgment on the claims asserted against them. As we shall explain below, the trial judge granted both motions on the ground that neither Welsh nor the McNeils had standing to bring their respective claims.

         II.

         Appellate review of a grant of summary judgment is de novo.[10] We will affirm if the record shows there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law.[11] In conducting our review, we construe the record "in the light most favorable to the non-moving party"; however, "mere conclusory allegations by the non-moving party are legally insufficient" to defeat a facially sufficient motion.[12] Rather, the opponent of the motion "must produce at least enough evidence to make out a prima facie case in support of [its] position."[13]Civil Rule 56 "mandates the entry of summary judgment" against a party that has failed to make a sufficient evidentiary showing on an essential element of its case with respect to which it has the burden of proof.[14]

         "Standing is a threshold jurisdictional question [that] must be addressed prior to and independent of the merits of a party's claims."[15] "[T]he question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue."[16] This, too, is an issue of law that is reviewed de novo.[17] When a lawsuit has reached the summary judgment stage and a party's standing is in issue, the requisite "standing must be shown through 'specific facts' set forth 'by affidavit or other evidence' to survive a motion for summary judgment."[18]

         Traditionally, we have looked to "federal standing jurisprudence, both constitutional and prudential, " for the principles that determine whether a party has standing to pursue a claim for relief.[19] "Constitutional" standing is grounded in the "case or controversy" language of Article III of the federal Constitution. The sine qua non of constitutional standing is the requirement that the claimant have such a "personal stake in the outcome of the controversy" as to justify calling upon the remedial powers of the court.[20] "A party has such a 'personal stake' only if: (1) he or she has suffered 'injury in fact' - an actual or imminent, concrete and particularized, invasion of a legally protected interest; (2) the injury is 'fairly . . . trace[able]' to [the] defendant's challenged actions; and (3) it is 'likely . . . the injury will be redressed by a favorable decision.'"[21]

         In addition to those requirements, we also adhere to "the rule that a party 'generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.'"[22] Unlike the constitutional standing requirements, this prohibition usually is viewed as a "prudential" limitation on standing.[23] As such, although it is a requirement of general applicability, it does not apply to claims for relief brought under statutes that provide otherwise. The Federal Fair Housing Act and the District of Columbia Human Rights Act are two such statutes; standing to sue under them has been held to be co-extensive with standing under Article III of the Constitution.[24]

         Standing ordinarily must persist throughout the litigation.[25] This implicates the related concept of mootness: "the doctrine of standing set in a time frame, " in that "[t]he requisite personal interest that must exist at the commencement of the litigation (standing) must continue throughout its existence (mootness)."[26] An action becomes moot, and the plaintiff thereby loses his standing to continue to maintain it, "when the issues presented are no longer 'live' or the parties lack 'a legally cognizable interest in the outcome.'"[27] Mootness, like standing, is a question of law that we review de novo.[28]

         III.

         A.

         Regarding Welsh's claim against the McNeils for leasing their townhouse in violation of the Bylaws, the trial judge ruled that because the Board of Directors approved the McNeils' lease after Welsh commenced his lawsuit, a dispute no longer existed for the court to resolve. The judge found no legal support for the proposition that an individual homeowner could challenge the decision of a homeowners association in court without suing the association itself or its Board of Directors.

         Welsh contends that the judge erred by relying on the mistaken (or at least disputed) premise that the Board validly approved the McNeils' lease. The trial judge did not address the validity of the Board's putative approval. I would conclude, however, that it was not necessary for the judge to address this issue in order to rule, correctly, that Welsh lost his standing to sue the McNeils directly once the Association approved their lease.

         Welsh did have standing to sue the McNeils for violating the Association's Bylaws when he commenced his action against them in January 2014. Ordinarily, a homeowners association has the primary responsibility of enforcing its rules and regulations for the good of the entire community; such communal enforcement has been recognized as "one of the chief benefits of owning property in a common- interest community" and a "chief function" of the association.[29] Nevertheless, except where governing documents or statutes provide otherwise, it is the general rule that individual members of a homeowners association also may sue to enforce the association's bylaws.[30] That general rule is incorporated in the Bylaws on which Welsh relies for standing to sue the McNeils. Those Bylaws state that individual homeowners have "the same rights as the Association to enforce any provision of these Bylaws except the right to collect delinquent assessments, " and that an "aggrieved" homeowner may seek legal relief for a violation of the Bylaws "if appropriate."

         Shared power to enforce the bylaws permits homeowners to act on violations when the homeowners association fails to do so.[31] The need for individual enforcement action typically arises when (unlike in the present case) the homeowner's claim is against the association itself[32] or the homeowner seeks a remedy for injury to his own personal property rather than a common injury.[33]

         The issue in this case is not whether Welsh had standing to sue the McNeils when he commenced his lawsuit. The issue is whether Welsh continued to have standing to pursue the suit after the President of the Association informed the McNeils that the Association had approved their lease - or whether, in other words, Welsh's complaint thereupon became moot.

         Shared power to enforce an association's bylaws becomes problematic when the parties who share the enforcement power disagree over whether it should be exercised. I am not aware of a case in which one member of a homeowners association was allowed to enforce a bylaw against another member over the association's objection, i.e., contrary to a decision by the association not simply to refrain from enforcing the bylaw itself but to waive it and permit or excuse the alleged violation. It is one thing for a homeowner to enforce the bylaws when the association is unable, unwilling, or too busy to expend the time and effort to do so itself; mere inaction by the association does not foreclose the homeowner's enforcement action because it does not actually conflict with the association's decision. It is quite another thing when the association, representing all its members, does act and opts to resolve the dispute differently, without enforcement of the bylaws. Generally speaking, a homeowners association has the power to release or compromise any claim it has the right to assert, and to do so over the objections of individual homeowners, who then are bound by the association's resolution of the claim.[34]

         Although the Bylaws in this case recognize an individual homeowner's right to sue for a violation of the Bylaws, their phrasing - that a homeowner has "the same rights as the Association to enforce" the Bylaws and may seek legal relief "if appropriate" - supports the view that the Association can foreclose such a lawsuit by resolving the claim itself. If the Association has waived its right to enforce a Bylaw, a homeowner who has only "the same rights as the Association" has no right to enforce it either. The Bylaw does not give individual homeowners superior or additional enforcement rights. It would be unreasonable to read the provision as empowering a Member to enforce a Bylaw that the Association has waived, for a Member's exercise of such an override power would interfere with the Association's ability to manage its affairs and represent the common interests of its Members, and it would threaten the reasonable expectations and legal rights of parties dealing with the Association and relying on its decisions. The words "if appropriate" also suggest a limitation on the individual Member's right to seek legal relief for a violation of the Bylaws; although the nature of that limitation is not spelled out, at least one court has understood similar words ("in any proper case") to mean that an association's decision to surrender a claim held in common by all its members precludes an individual member from pursuing the claim directly against the alleged violator.[35]

         The Association's waiver of a right held in common would not necessarily bar a homeowner from pursuing a claim based on a different legal right or for an individual (as opposed to common) injury such as damage to the homeowner's personal unit or property. In this case, though, Welsh does not contend that he is asserting any right other than the same legal right the Association possessed to enforce the Bylaws against the McNeils for the common welfare of the Membership. The interest Welsh claims to have at stake is simply his interest in the enforcement of the Bylaws for the good of the Association as a whole, an interest he shares in common with all other homeowners. Thus, in his complaint, Welsh described the harm allegedly caused or threatened by the McNeils as follows:

Plaintiff and the Association have suffered damages as a result of Defendants' violation. The Association has valid reasons to require members to provide names of the tenants and to prohibit terms of less than 1 year. Such provisions are essential to the orderly management of the Association and to preserve the financial viability of the Association. Compliance with rules is necessary to collect HOA [Homeowners Association] fees in the event of a member default, or assessments in the event of a violation of bylaws.

         Despite his pro forma request for monetary damages, Welsh did not and still does not claim to have been injured directly and personally by the McNeils' lease of their townhouse to Oxford House - Texas Avenue. At no point in this entire litigation - not in his complaint, nor at the summary judgment stage, nor even on appeal - has Welsh been able to identify any personal injury for which a court could award him monetary relief.[36] Merely pleading that one is entitled to unspecified monetary damages, without identifying an injury they would redress, is not enough to show personal standing.[37] By the summary judgment stage at the latest, when he faced a direct challenge to his standing, it was Welsh's burden to proffer evidence of a personal injury on which he predicated his claim for recoverable damages.[38] He did not do so.

         At oral argument in this appeal, the court inquired as to what monetary damages Welsh hoped to recover. His counsel responded that Welsh seeks to be compensated for his attorney's fees and costs (including the value of his own time) incurred in prosecuting this litigation against the McNeils. Welsh contends that his expectation of being awarded attorney's fees and costs pursuant to the Bylaws if he prevails on his claim against the McNeils suffices by itself to support his standing to pursue the litigation. But that is not so. "[A] party's interest in pursuing litigation in order to be awarded attorney's fees [and costs] cannot by itself create the requisite live controversy 'where none exists on the merits of the underlying claim.'"[39]

         Welsh implicitly concedes that his claim against the McNeils would be moot if the Association's Board of Directors properly approved their lease. Welsh's argument is that the Board vote was not a valid approval, in spite of the representation in the President's letter to the McNeils, and that the Association therefore did not waive its right to enforce the Bylaws against the McNeils. Consequently, Welsh concludes, the Association did not preclude him from continuing his individual suit to enforce the Bylaws and stop the McNeils from leasing their townhouse to Oxford House - Texas Avenue. But whether the Board validly approved the lease or not, the President's letter to the McNeils said it did. ...


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