February 15, 2018
from the Superior Court of the District of Columbia
(CAR-3639-14) Hon. Ronna Lee Beck, Trial Judge.
Liss for appellant.
D. Wright for appellee.
Glickman and McLeese, Associate Judges, and Ruiz, Senior
Proulx appeals the trial court's determination that she
is liable for breach of a contract for commercial property
that was sold to her by appellee 1400 Pennsylvania Avenue,
SE, LLC. Appellant argues that the court erred in (1) finding
that the contract was not a contract of adhesion, and (2)
concluding that the liquidated damages provision was valid.
We affirm the judgment of the trial court.
February of 2012, Remy Esquenet, an attorney and real estate
broker representing appellee, and Ken Noroozi, a real estate
broker representing appellant, began negotiations regarding
the lease and sale of a property located at 1400
Pennsylvania, SE in Washington D.C. Appellant's brother,
Mian Amir, was also heavily involved in the contract
negotiations. The property, a vacant ground floor retail unit
and basement, was to be used by appellant, her brother, and
their family for their family business, a pizza restaurant.
While negotiating the sale of the property to appellant,
appellee was in the process of incorporating as an LLC and
purchasing the property from its previous owner.
March 7, 2012, appellant and appellee entered into a
commercial Contract of Purchase and Sale ("the
Contract"), which provided that appellant would purchase
the property for $550,000. Under the terms of the Contract and
pursuant to a Commercial Pre-Occupancy Agreement ("the
Pre-Occupancy Agreement") attached to the
Contract, appellant would take
possession of the property between March 15 and 26, 2012, and
final settlement on the sale would take place during the
twelve-month period after the first year of occupancy, i.e.,
March 2013 to March 2014. The Contract called for a non-refundable
$150,000 deposit, which would ultimately be credited towards
the purchase price of $550,000 at the time of
settlement. The Contract also provided
that, in the event of breach by appellant, the $150,000
deposit would serve as liquidated damages.
March 12, 2012, appellee was incorporated as an LLC, and, on
March, 13, 2012, appellee purchased the property from its
previous owner for $465,000. Appellant then paid appellee the
$150,000 deposit, and, by March 26,
2012, took possession of the property.
the parties performed under the Pre-Occupancy Agreement:
appellee paid property taxes and condominium fees, while
appellant occupied and exercised control over the property,
paying appellee $4,000 per month in rent before later falling
delinquent. Appellant was also unable to close on the
purchase before the final possible settlement date under the
Contract: March 26, 2014. In April of 2014, the property was vacant
and no business was being conducted; on or around May 1,
2014, appellee changed the locks on the property.
13, 2014, appellant filed a complaint alleging that the
Contract should be rescinded and that the $150,000 liquidated
damages provision was an unenforceable penalty and the
deposit should be returned. Appellee filed a counterclaim
alleging that appellant was in breach of the Pre-Occupancy
Agreement, and owed $24,000 in past-due rent. Following a
bench trial, the trial court ruled in favor of appellee on
the complaint and counterclaim, finding that rescission of
the Contract would be unjust, allowing the liquidated damages
clause to stand, and holding that appellant owed appellee
$24,000 for unpaid rent and $779 for the insurance purchased
by appellee that had been appellant's responsibility, as
well as attorney's fees and costs. Appellant filed this
contends that the Contract is a contract of adhesion and that
the trial court therefore erred in finding that the Contract
was enforceable. "A contract of adhesion is defined
generally as one imposed upon a powerless party, usually a
consumer, who has no real choice but to accede to its
terms." Woodroof v. Cunningham, 147 A.3d 777,
789 (D.C. 2016) (quoting Andrew v. American Imp.
Ctr., 110 A.3d 626, 633 n.8 (D.C. 2015)). Determining
whether a contract is a contract of adhesion is a
fact-specific inquiry, in which the court examines the
relative bargaining power of the parties and the
circumstances under which the contract was negotiated and
signed. See Andrew, 110 A.3d at 633 n.8, 637-38;
Moore v. Waller, 930 A.2d 176, 182 (D.C. 2007)
("There must be a showing that the parties were greatly
disparate in bargaining power, that there was no opportunity
for negotiation and that the services could not be
obtained elsewhere." (citation omitted)). We review the
trial court's findings of fact for clear error. See,
e.g., Boyd v. Kilpatrick Townsend &
Stockton, 164 A.3d 72, 78 (D.C. 2017); Ballard v.
Dornic, 140 A.3d 1147, 1150 (D.C. 2016).
trial court did not err in its determination that the
Contract between appellant and appellee was not a contract of
adhesion, but was a negotiated deal between parties of
equivalent bargaining power. There were oral negotiations
between the parties and multiple drafts of the Contract were
sent back and forth between them. Appellant, Amir, and
Noroozi testified that they were highly educated and
experienced in real property transactions. Because there was ample evidence in the
record to support the trial court's finding ...