Submitted March 1, 2018
On
Petition for Review of an Order of the District of Columbia
Office of Administrative Hearings (DCRA-112-15)
Phillip J. Collins was on the brief for petitioner.
Karl
A. Racine, Attorney General for the District of Columbia,
Todd S. Kim, Solicitor General at the time the brief was
filed, Loren AliKhan, Deputy Solicitor General at the time
the brief was filed, and Mary L. Wilson, Senior Assistant
Attorney General at the time the brief was filed, were on the
brief for respondent.
Before
Glickman and Thompson, Associate Judges, and Nebeker, Senior
Judge.
THOMPSON, ASSOCIATE JUDGE
On
December 7, 2015, the District of Columbia Department of
Consumer and Regulatory Affairs ("DCRA") revoked a
building permit (Building Permit No. B1411058, hereafter
"the Building Permit") that had been issued to
Westend Development LLC ("Westend Development"),
the trade name of Varnum Holdings, LLC ("Varnum
Holdings"). Thereafter, petitioner Varnum Properties,
LLC ("VP") petitioned the Office of Administrative
Hearings ("OAH") for review of the DCRA revocation
decision. After the OAH Administrative Law Judge
("ALJ") raised sua sponte the issue of
whether VP had standing to appeal the revocation decision, VP
responded by filing a motion to add Varnum Holdings as an
additional petitioner whose participation was "necessary
to 'effectively and completely adjudicate the
dispute.'" In a May 9, 2016, Final Order (the
"May 9 Order"), the OAH ALJ denied the motion to
add Varnum Holdings as a party and dismissed VP's
petition on the ground that VP lacked standing to challenge
the revocation.[1] VP sought reconsideration of that ruling,
and on July 8, 2016, the OAH ALJ issued an Order Denying
Reconsideration of Final Order (the "July 8
Order"). VP now seeks review of the May 9 and July 8
Orders. We reverse and remand.
I.
The
Building Permit authorized construction work at 1521 Varnum
Street, N.W. (the "Property") (specifically, the
conversion of a single family dwelling into two
flats).[2] VP asserts that the "underlying
zoning" has been changed since the Building Permit was
issued, with the result that "any new permit application
for the same project would no longer be permitted." VP
further asserts that DCRA's counsel has informed VP that
"the only change to the Building Permit that would be
considered would be a new application under the revised
zoning regulations." According to VP, this means that
DCRA will not approve a request by VP to transfer the
Building Permit to VP.[3]
In
petitioning for review of the December 7, 2015, notice of
revocation of the Building Permit, VP asserted that it was
the "successor-in-interest to Varnum Holdings, LLC d/b/a
Westend Development." However, in an April 1, 2016,
order denying VP's first motion for summary judgment, the
ALJ found that there was no record evidence that VP was the
owner of the Property and no evidence of VP's standing to
appeal the revocation notice. As part of a subsequent,
renewed motion for summary adjudication, VP submitted the
affidavit of its managing member, Michael Taylor, to support
VP's assertion that VP was formerly known as AMT-Varnum,
LLC ("AMT-Varnum"); that on or about November 12,
2015 (about three weeks prior to the notice of revocation),
AMT-Varnum purchased the Property from Varnum Holdings, d/b/a
Westend Development; and that VP therefore "is the
current owner of the Property."
The ALJ
ruled on VP's renewed motion for summary judgment on
April 11, 2016. Citing 12A DCMR § 105.6.4.1 (2015)
("[t]he permit holder may appeal a notice of revocation
. . . no later than 10 business days after service of written
notice of the revocation upon the permit holder[]"), the
ALJ explained that "[p]etitioner's right to appeal
the [n]otice of the proposed revocation is dependent on it
being the holder of the permit." The ALJ acknowledged
that DCRA, in its opposition to the renewed motion for
summary judgment, did not dispute VP's ownership of the
Property. What the ALJ found to be decisive, however, was
that VP "ha[d] not alleged, let alone proved, that the
permit in question was transferred to it by the permit
holder."[4] The ALJ denied petitioner's renewed
motion for summary judgment "since [p]etitioner ha[d]
not demonstrated that it ha[d] standing to appeal the
[n]otice and is entitled to the relief it request[s] as a
matter of law."
Upon
that ruling by the ALJ, DCRA on the same day filed a motion
to dismiss VP's appeal, echoing the ALJ's finding
that VP "ha[d] not established transfer of the permit
from the permit holder to petitioner and therefore . . .
d[id] not have standing" to pursue the appeal from the
revocation notice. VP responded the next day (April 12, 2016)
by moving to add Varnum Holdings as a party. VP attached to
its motion a "Bill of Sale" reflecting that on that
same day, it had purchased all of the membership interests in
Varnum Holdings.
In the
May 9 Order, the ALJ denied VP's motion to add Varnum
Holdings as a party. The ALJ reasoned that VP had not shown
either that it acquired all the assets of Varnum Holdings,
including the Building Permit, or that the Building Permit
was properly transferred to it in accordance with 12A DCMR
§ 105.5.3. The ALJ concluded that because the
"legal right to the permit" was not with VP, VP
lacked standing to contest the revocation.
VP
sought reconsideration of the ALJ's ruling. After a
telephonic hearing on July 6, 2016, the ALJ issued the July 8
Order, denying the motion for reconsideration. Construing
VP's motion as a motion "to add, or substitute"
Varnum Holdings as a party, [5] the ALJ found that VP had not
stated grounds warranting reconsideration under OAH Rule
2828.5 (stating inter alia that an ALJ may change a
final order if it "contains an error of law[, ]"
id. ยง 2828.5(c) (Apr. 2016). The ALJ reasoned
that VP had "not shown how adding, or substituting,
Varnum Holdings as a party[] would ...