SUPERIOR COURT OF THE DISTRICT OF COLUMBIA

CIVIL DIVISION

2003 11TH STREET, LLC, Plaintiff, v. MAHOGANY, LLC, Defendant.

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Case No. 2013 LTB 8971 Judge Laura A. Cordero

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION

FOR COSTS, EXPENSES AND ATTORNEY FEES

This matter comes before the Court on Defendant Mahogany, LLC’s Motion for

Costs, Expenses and Attorney [sic] Fees (“Motion”), filed on April 18, 2014. Plaintiff, 2003

11th Street, LLC, filed its Memorandum of Points and Authorities (“Plaintiff’s Opposition”) in

Opposition to Defendant’s Motion, on May 2, 2014. For the reasons stated below,

Defendant’s Motion is granted in part and denied in part.

I. BACKGROUND

Plaintiff filed a Complaint against Mahogany, LLC and Sashi Brown, guarantor of the

lease, on April 5, 2013, claiming failure to cure timely payment of rent, failure to replace a

roof membrane and the structure below, and failure to remove obstructions of the side door of

the premises. Mot. at 1; Pl. Opp’n at 1-2. On August 2, 2013, the Defendants filed a Motion

for Summary Judgment, arguing that Sashi Brown was not a proper party in the action.

Defendants also filed a Motion for Summary Judgment as to Count I of the Complaint. Mot.

at 2. The Motion regarding Sashi Brown was granted by Judge Natalia Combs Green on

August 20, 2013 at a Rule 13 Motion Hearing. See Super. Ct. L&T R. 13. At the hearing,

Plaintiff also withdrew Count I of its original Complaint, failure to pay timely rent. Pl. Opp’n

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at 3, 7-9. On October 21, 2013, Plaintiff moved for leave to file an Amended Complaint,

which was granted on October 30, 2013.

After three continuances, a non-jury trial was held on November 14, 2013. On the day

of trial, Plaintiff’s counsel attempted to withdraw Count II of the Amended Complaint,

regarding the roof. This Count was dismissed with prejudice. The case then proceeded to trial

on Count III of the Amended Complaint and judgment was entered in favor of Defendant.

II. LEGAL STANDARD

The Court’s decision regarding fees and costs is made pursuant to Superior Court

Landlord and Tenant Rule 15(b).1 See Super. Ct. L&T R. 15(b). Costs other than attorney’s

fees are awarded to the prevailing party as a matter of course, unless directed otherwise. Id.

Claims for other expenses may be awarded within the Court’s discretion. Id.

When considering attorney’s fees, the Court is generally guided by the “American

Rule,” in which each party pays its respective fees for legal services. Georgia Avenue v.

Univ. Comm. Dev., 954 A.2d 967, 971 (D.C. 2008). However, exceptions may apply in the

presence of statutory authority, contractual agreement, or certain common law exceptions. Id.

The “bad faith” exception allows a party to recover attorney’s fees from an opposing party by

demonstrating that the opposing party acted in bad faith. Jung v. Jung, 844 A.2d 1099, 1108

(D.C. 2004). Bad faith is defined as either filing a frivolous action, or litigating a properly

filed action in a frivolous manner. Id.

The test for whether a litigant is acting in bad faith is “whether the claim is entirely

without color and has been asserted wantonly, for purposes of harassment or delay, or other

reasons.” Synanon Found., Inc. v. Bernstein, 517 A.2d 28, 40 (quoting Browning Debenture

1 Defendant in its motion, cited to Rule of Civil Procedure 54(d). Mot at 1; Super. R. Civ. P. 54(d). However, as

this is a landlord and tenant case, the motion will be reviewed pursuant to Rule 15 of the Rules of Civil Procedure

for the Landlord and Tenant Branch. See Super. Ct. L&T R.

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Holders’ Comm. v. DASA Corp., supra, 560 F.2d 1078, 1088 (2d Cir.1977)). A claim is

colorable when it “has some legal and factual support, considered in light of the reasonable

beliefs of the individual making the claim.” Id. (quoting Nemeroff v. Abelson, 620 F.2d 339,

348 (2d Cir.1980) (per curiam)). The Court decides whether a “reasonable attorney could

have concluded that facts supporting the claim might be established, not whether such facts

actually had been established at the time the complaint was filed.” Id. Finally, “procedural

‘maneuvers’ lacking ‘justification or for an improper purpose, such as harassment or delay’”

may also constitute a party’s bad faith. Id. (quoting Browning, 560 F.2d at 1088).

III. ANALYSIS

Rule 15(b) allows non-legal costs to the prevailing party as a matter of course. Super.

Ct. L&T R. 15(b). Therefore, Defendant is granted these expenses, which total $130.71.

Regarding attorney’s fees, Defendant submits four distinct arguments in support of its claim

that it is entitled to attorney’s fees because Plaintiff acted in bad faith. Mot. at 3-4.

A. INCLUSION OF SASHI BROWN

First, Defendant argues that Plaintiff filed suit against Sashi Brown in its sole purpose

of holding him responsible for attorney’s fees. Id. at 4. Defendant also claims Plaintiff knew

Mr. Brown was not in possession of the premises, and thus not a proper party to the suit. Id.

However, Plaintiff asserts that the guaranty clause of the lease makes the guarantor

responsible for non-monetary obligations of the lease, and thus he was a proper party. Pl.

Opp’n at 7.

Defendant’s argument does not establish that Plaintiff’s claim was brought in bad

faith. When filing the claim, Plaintiff expressed a reasonable belief that Mr. Brown, as

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guarantor of the lease, was a proper party to claim non-monetary obligations in the case of the

corporate Defendant’s failure to perform its obligations. Plaintiff cited to the Guaranty stating

“if at any time the Tenant shall fail to perform and observe when as required any of Tenant’s Non Monetary Obligations, the Guarantor shall forthwith pay Tenant’s Monetary Obligations to the Landlord . . . . and punctually perform and fulfill all of Tenant’s Non Monetary Obligations and, in addition thereto, shall forthwith pay to Landlord all reasonable attorneys fees and disbursements incurred by the Landlord . . . ." Id. Ex. 2.

Based on the Guaranty, a reasonable attorney could have concluded that a claim against Mr.

Brown was colorable, as the guarantor must fulfill the tenant’s non-monetary obligations.

That a claim was pursued unsuccessfully does not necessarily mean it was made in bad faith.

See Ginsberg v. Granados, 963 A.2d 1134, 1138 (citing Autorama Corp. v. Stewart, 802 F.2d

1284, 1288 (10th Cir. 1986)). Therefore, this claim was not brought in bad faith.

B. INCLUSION OF COUNT I

Defendant argues that Plaintiff’s habitual non-payment of rent claim was filed in bad

faith and withdrawn only after it incurred substantial expense. Mot. at 4. Plaintiff counters,

alleging the claim was pursued until Defendant produced payment receipts, in their August 2,

2013 Motion. Pl. Opp’n at 10. Plaintiff also claims to have changed its position after

Defendant made arguments in light of Pritch v. Henry regarding the grace period afforded to

tenants after receiving notice to cure or vacate. Id.; 543 A.2d 808 (D.C. 1988).

Here, Defendant’s arguments do not demonstrate that Plaintiff’s actions were made in

bad faith. The Court determines whether a reasonable attorney could have concluded that

facts supporting the claim might be established, not whether the tenant was actually in

violation of the lease. See Synanon, 517 A.2d at 40 (quoting Nemeroff, 620 F.2d at 348).

Plaintiff demonstrated a good faith belief that Defendant was in violation of the lease, and this

was evidenced by claims of late rent beginning in 2007 and continuing through 2012.

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Plaintiff cites several account ledgers, e-mails, and notices in support. Id. Exs. 5-7. Together,

these exhibits demonstrate “some factual support” sufficient for a meritorious claim. See

Synanon, 517 A.2d at 40 (quoting Nemeroff, 620 F.2d at 348). Thus, Defendant has not

shown this claim to be completely without color.

C. WITHDRAWAL OF COUNT 2

Defendant asserts that Plaintiff withdrew its claim regarding the roof because proof

was lacking, but only after Defendant incurred substantial expense to refute it. Mot. at 4.

Plaintiff argues instead the claim was unripe, an issue only discovered just before trial. Pl.

Opp’n. at 10.

Defendant’s assertions do not demonstrate this claim was made in bad faith. Plaintiff

need only have some factual support to assert a meritorious claim. Earlier in litigation,

Plaintiff claimed there were several issues with the roof, which Defendant was required to

repair. Pl. Opp’n. at 10. Plaintiff’s attorney demonstrated a reasonable belief that facts

supporting this claim might be established. Id. Defendant has not demonstrated the claim to

be without color, but instead calls into question its lack of proof. A cause of action is not

completely without color simply because of a failure of proof. See Jung, 844 A.2d. at 1110

(holding that failure of proof at trial cannot, without more, be a basic for a finding of bad

faith); Id. (“[T]he fact that this litigation ultimately proved to be misguided and unconvincing

cannot in itself serve as a basis for assessing attorneys' fees against the plaintiff.”) (quoting

Driscoll v. Oppenheimer & Co., 500 F.Supp 174, 176 (N.D.Ill. 1980)); Id. (“Mere failure of a

party to present sufficient evidence to support [a] claim will not in itself warrant a

determination of frivolity.”) (quoting Aid Auto Stores, Inc. v. Cannon, 525 F.2d 468, 471 (2d

Cir. 1975)). Therefore, Defendant has not demonstrated this claim to be filed in bad faith.

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D. POSSIBLE PRETEXT

Defendant’ finally cites the Court’s credibility determination at the November 14,

2013 trial regarding Plaintiff’s witness, Amir Afshar. Mot. at 4-5; Pl. Opp’n. at 11. Plaintiff

argues because the claim was fully litigated, any ulterior motive of bringing the suit was

mitigated. Pl. Opp’n at 11-12.

Plaintiff accurately cites the Court of Appeal’s holding that “litigation is often

brought for a host of reasons, and with varying degrees of animus and vehemence.” Id.; Jung,

844 A.2d at 1112. Thus, only when an:

“[u]lterior motive subsume[s] the litigation and impel[s] a litigant to file a meritless claim, interpose a frivolous defense, or undertake an unjustified procedural maneuver, that the judicial process is abused and the litigant’s conduct comes within the ambit of the bad faith exception.” Id.

In Jung, the Court of Appeals rejected appellant’s argument that letters evidencing appellee’s

bad faith demonstrated a meritless claim. Id. at 1113. The Court of Appeals found Appellant

failed to satisfy the first prong of the bad-faith test: whether the claim was without color in the

first place. Id. (citing Gen. Fed’n Women’s Clubs v. Iron Gate Inn, Inc., 537 A.2d 1123,

1128-29 (D.C. 1988)). While Defendant correctly notes the Court’s mention of Plaintiff’s

possible pretext to its case, the mere presence of a pretext cannot by itself demonstrate a bad

faith or frivolous action. Mot. at 4-5. Defendant must affirmatively demonstrate the claims to

be without color, and “asserted wantonly, for purposes of harassment or delay, or other

reasons.” Synanon, 517 A.2d at 40 (quoting Browning, 560 F.2d at 1088). Defendant has not

asserted facts that would demonstrate this. Therefore, as Defendant has not shown that

Plaintiff litigated this suit in bad faith, the “American Rule” applies and the request for

attorney’s fees is denied.

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Upon consideration of Defendant’s Motion, Plaintiff’s Opposition, and the record

herein, it is this 24th day of July, 2014, hereby:

ORDERED, that Defendant Mahogany, LLC’s Motion is GRANTED IN PART

regarding costs and expenses other than attorney’s fees, and DENIED IN PART regarding

attorney’s fees; and it is

FURTHER ORDERED, that Plaintiff shall pay Defendant $130.71 by August 25,

2014.

SO ORDERED.

____________________________________ Laura A. Cordero

Associate Judge (Signed in Chambers)

Copies to: John H. Brillian, Jr. Esq. Kass, Mitek & Kass, PLLC 1050 17th Street, N.W., Suite 1100 Washington, DC 20036 Kevin B. McParland Esq. Bregman, Berbert & Schwartz 7315 Wisconsin Ave., Suite 800W Bethesda, MD 20814