Court Opinion

ID: 9953018
Source: CourtListenerOpinion
Date Created: 2024-03-21 14:02:49.375376+00
Date Added: 2024-06-11T14:45:36.302370
License: Public Domain

Notice: This opinion is subject to formal revision before publication in the Atlantic
and Maryland Reporters. Users are requested to notify the Clerk of the Court of
any formal errors so that corrections may be made before the bound volumes go
to press.

             DISTRICT OF COLUMBIA COURT OF APPEALS

                                 No. 23-CV-0108

                        KIDS HOLDINGS, INC., APPELLANT,

                                        v.

                           CORDIA HINOJOSA, APPELLEE.

                        On Appeal from the Superior Court
                           of the District of Columbia
                            (2018-CA-005961-R(RP))

                       (Hon. Yvonne Williams, Trial Judge)

(Submitted October 16, 2023                               Decided March 21, 2024)

      Ian G. Thomas and Tracy L. Buck were on the brief for appellant.

      Tyler Jay King was on the brief for appellee.

      Before BECKWITH AND MCLEESE, ∗ Associate Judges, and THOMPSON, Senior
Judge.

      MCLEESE, Associate Judge: Appellant Kids Holdings, Inc. challenges an order

that (1) granted appellee Cordia Hinojosa relief from a judgment in Kids Holdings’s

      ∗
        Associate Judge AliKhan was originally assigned to this case. Following
her appointment to the U.S. District Court for the District of Columbia, effective
December 12, 2023, Associate Judge McLeese has been assigned to take her place
on the division.
                                          2

favor on the basis that Kids Holdings was not registered to do business in the District

of Columbia; and (2) for that reason, quashed a writ that the Superior Court had

issued to permit Kids Holdings to force the sale of real property owned by

Ms. Hinojosa in order to satisfy the judgment. We vacate the order of the Superior

Court and remand for further proceedings.

                     I. Factual and Procedural Background

      The following facts appear to be undisputed. Kids Holdings filed an action

alleging that Ms. Hinojosa had defaulted under a loan to finance the purchase of a

parcel of real property. The trial court entered judgment for Kids Holdings in 2019,

and this court affirmed that judgment in 2022.

      Kids Holdings then began collection efforts, and the Superior Court issued a

writ directing that Ms. Hinojosa’s property be sold to satisfy the judgment.

Ms. Hinojosa filed a motion to quash the writ, which included a request that the

judgment be vacated under Super. Ct. Civ. R. 60(b). In support of the latter request,

Ms. Hinojosa argued that Kids Holdings was not registered to do business in the

District and therefore could not maintain an action in Superior Court. See D.C. Code

§ 29-105.02 (requiring certain business entities doing business in D.C. to register

with the Mayor and providing that entities that fail to register as required “may not

maintain an action or proceeding in the District”).
                                         3

      For the same reason, Ms. Hinojosa argued that the trial court should quash the

writ. Ms. Hinojosa also objected to the issuance of the writ on the merits, arguing

that the real property at issue was exempt from attachment because it was her home.

      Kids Holdings opposed the request that the trial court vacate the judgment,

arguing that the request was untimely. Kids Holdings also disputed Ms. Hinojosa’s

argument that the property at issue was exempt from attachment.

      The trial court granted “full relief” from the 2019 judgment, pursuant to Rule

60(b)(6). The trial court did not decide whether Section 29-105.02 establishes a

jurisdictional prerequisite to entering a judgment. Instead, the court concluded that

the registration requirement in Section 29-105.02 is not waivable, and Ms. Hinojosa

therefore was entitled to relief from the judgment even though Ms. Hinojosa had not

raised Kids Holdings’s lack of registration before judgment was entered. For the

same reason, the trial court granted the motion to quash the writ. Kids Holdings

moved for reconsideration of the trial court’s order, and the trial court denied that

motion.
                                          4

                                       II. Analysis

                         A. Timeliness of the Notice of Appeal

      Ms. Hinojosa argues that the notice of appeal was untimely filed.           We

disagree.

      The trial court issued the order granting relief from the judgment and quashing

the writ on November 9, 2022. Kids Holdings filed a motion to reconsider that ruling

on November 15, 2022. The trial court denied that motion on January 19, 2023.

Kids Holdings noted this appeal on February 10, 2023.

      Generally, a notice of appeal in a civil case must be filed within thirty days

after entry of judgment. D.C. App. R. 4(a)(1). That time period is tolled, however,

if the party timely files certain post-judgment motions in the Superior Court. D.C.

App. R. 4(a)(4). Kids Holdings’s motion to reconsider did not cite a specific court

rule, but in substance it was a motion to vacate, alter, or amend the judgment under

Super. Ct. Civ. R. 59(e). Such a motion is timely if filed within twenty-eight days

after entry of judgment. Id. Kids Holdings’s motion therefore was timely and

operated to toll the time period within which Kids Holdings could file a notice of

appeal. After the trial court denied the motion, Kids Holdings had thirty days to note
                                         5

its appeal. D.C. App. R. 4(a)(4). Kids Holdings’s notice of appeal therefore was

timely.

                            B. Subject-Matter Jurisdiction

      Ms. Hinojosa     argues     that   the    registration   requirement     under

Section 29-105.02 goes to the trial court’s subject-matter jurisdiction. We hold as a

matter of law that lack of registration under Section 29-105.02 does not affect the

subject-matter jurisdiction of the Superior Court. See generally, e.g., Grayson v.

AT&T Corp., 15 A.3d 219, 228 (D.C. 2011) (en banc) (“Whether the trial court has

subject matter jurisdiction is a question of law which this court reviews de novo.”)

(internal quotation marks omitted).

      “Subject matter jurisdiction concerns the court’s authority to adjudicate the

type of controversy presented by the case under consideration.” Davis & Assocs. v.

Williams, 892 A.2d 1144, 1148 (D.C. 2006) (internal quotation marks omitted). The

Superior Court is “a court of general jurisdiction with the power to adjudicate any

civil action at law or in equity involving local law.” King v. Kidd, 640 A.2d 656,

661 (D.C. 1993) (internal quotation marks omitted). “Unless the legislature has

divested the Superior Court of jurisdiction of a particular subject matter through

enactment of legislation, the court has general jurisdiction . . . over common law
                                          6

claims for relief.” Id. The complaint in this case alleged a breach of contract, which

falls within the subject-matter jurisdiction of the Superior Court.

      As Ms. Hinojosa notes, however, Section 29-105.02 prohibits entities that

have not properly registered to do business in the District from maintaining an action

in the courts of the District. The question is whether that prohibition deprives the

Superior Court of subject-matter jurisdiction to hear a case or instead imposes a non-

jurisdictional disability on the unregistered company. We hold the latter.

      “[W]e have stressed that . . . statutory restrictions on authority are generally

non-jurisdictional unless the legislature clearly meant for noncompliance to have

jurisdictional consequences.” Fraternal Ord. of Police/Metro. Police Dep’t Lab.

Comm. v. D.C. Metro. Police Dep’t, 277 A.3d 1272, 1279 (D.C. 2022) (ellipsis and

internal quotation marks omitted). That approach reflects the “drastic consequences

that accompany a jurisdictional label, and a belief that the legislature does not

impose [those consequences] lightly.” Id. (internal quotation marks omitted). “For

example, . . . jurisdictional constraints cannot be relaxed for equitable reasons[,]

[n]or can they be waived or forfeited . . . .” Id. (citations and internal quotation

marks omitted).

      This court has not previously decided whether Section 29-105.02 goes to the

subject-matter jurisdiction of the Superior Court. We have, however, previously
                                           7

decided a case involving a similar statute that precluded a party who had not paid

certain fees or penalties from “maintain[ing] . . . any action” in the District until the

fees had been paid. York & York Constr. Co. v. Alexander, 296 A.2d 710, 711 (D.C.

1972) (internal quotation marks omitted). This court held that that statute did not

require dismissal of pending litigation or bar reinstatement of a dismissed action if

the necessary fees were paid. Id. at 713-15. That holding implies that the court was

not treating the statute at issue as jurisdictional in character, because the lack of

subject-matter jurisdiction at the time of the filing of a complaint generally cannot

be remedied by later developments. See, e.g., Brown v. Hines-Williams, 2 A.3d

1077, 1080 (D.C. 2010) (“Whether a court acquires subject-matter jurisdiction over

a case depends on the facts relevant to such jurisdiction as of the time the court’s

jurisdiction is invoked, e.g., the date on which a suit is filed.”); cf. Grupo Dataflux

v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570 (2004) (“It has long been the case that

the jurisdiction of the court depends upon the state of things at the time of the action

brought.”; change of citizenship of party after action was filed did not remedy lack

of diversity at time action was filed) (internal quotation marks omitted).

      In reaching its holding, York relied on federal decisions interpreting a D.C.

Code provision even more similar to Section 29-105.02. York, 296 A.2d at 713-14

(discussing, e.g., Hill-Lanham, Inc. v. Lightview Dev. Corp., 163 F. Supp. 475, 476

(D.D.C. 1957) (interpreting provision stating that corporation that transacted
                                           8

business in the District without certificate of authority could not “maintain an action”

in the District until corporation obtained certificate of authority)). As we explained

in York, “[t]he vast majority of courts interpret statutes which preclude maintaining

an action until there is compliance with certain state requirements as meaning that

compliance after an action has commenced is sufficient to enable the corporation to

proceed with its suit.” 296 A.2d at 714 (internal quotation marks omitted). In other

words, “non-compliance [with such provisions] is a mere temporary disability and,

therefore, capable of obviation at any stage of the proceedings.” Hill-Lanham, 163

F. Supp. at 476.

      Essentially for the reasons stated in York and Hill-Lanham, we hold that the

registration requirement under Section 29-105.02 does not go to the Superior Court’s

subject-matter jurisdiction.

                                    C. Forfeiture

      The trial court concluded that “an entity’s unregistered status is a non-

waivable [defense] that may be raised at any time.” We disagree.

      In general, defenses are forfeited if not timely raised before judgment. See,

e.g., Mitchell v. Gales, 61 A.3d 678, 683-87 (D.C. 2013) (“The affirmative defense

of res judicata is subject, like other affirmative defenses, to waiver if not raised in
                                          9

the answer or timely asserted thereafter.”) (brackets, ellipsis, and internal quotation

marks omitted). We note that, although our cases sometimes refer to untimely raised

arguments or defenses as having been waived, our more recent practice is to refer to

such arguments or defenses as having been forfeited. See, e.g., Massey v. Massey,

210 A.3d 148, 151 n.4 (D.C. 2019) (Failure to raise a defense in a timely manner is

“better characterized as . . . forfeiture.”; “Whereas forfeiture is the failure to make

the timely assertion of a right, waiver is the intentional relinquishment or

abandonment of a known right.”) (internal quotation marks omitted).

      The general requirement that defenses be timely raised before judgment

reflects the strong interest in the finality of judgments. See, e.g., Mitchell, 61 A.3d

at 684 (“A fundamental principle of litigation that has been stressed in a variety of

contexts is the importance of finality.”) (internal quotation marks omitted); see also,

e.g., Clement v. D.C. Dep’t of Hum. Servs., 629 A.2d 1215, 1219 (D.C. 1993) (“[T]he

purpose of [Super. Ct. Civ. R.] 60(b) is to respect the finality of judgments by

providing post-judgment relief only under exceptional circumstances, in unusual and

extraordinary situations justifying an exception to the overriding policy of finality,

or where the judgment may work an extreme and undue hardship.”) (citations

omitted).
                                             10

       We see no adequate reason to give special treatment to the affirmative defense

of a business entity’s lack of registration under Section 29-105.02. Although this

court has not previously addressed whether lack of registration under Section

29-105.02 can be forfeited if not timely raised, we have treated a very similar defense

as “waived” because not timely raised. See Tenants of Minn. Gardens, Inc. v. D.C.

Rental Hous. Comm’n, 570 A.2d 1194, 1196 (D.C. 1990) (tenants “waived” defense

that landlord lacked certificate of authority to do business in D.C., by failing to raise

defense before administrative agency; “In cases where a party brings an action which

it has no legal authority to file, . . . a court will not void the proceeding after the fact.

In such cases, the opposing party must ordinarily bring the defect to the attention of

the court at the time the action is filed.”). For the same reason, we hold that lack of

registration under Section 29-105.02 can be forfeited if not raised in a timely manner.

       In concluding to the contrary that lack of registration under Section 29-105.02

can be raised at any time, the trial court relied on HVAC Specialist, Inc. v. Dominion

Mechanical Contractors, Inc., 201 A.3d 1205 (D.C. 2019). We view HVAC as

significantly different from the present case.

       HVAC held that a defense based on a subcontractor’s lack of a required license

to perform air-conditioning and refrigeration work was not “waivable.” 201 A.3d at

1209-12. HVAC acknowledged that such defenses usually must be raised in a timely
                                          11

manner. Id. at 1211. HVAC held, however, that the particular licensing requirement

at issue fell within a “public policy exception” because the licensing requirement

was intended to “protect public health, safety or welfare, or to assure the public that

persons engaged in such occupations or professions have the specialized skills or

training required to perform the services offered.” Id. at 1210 (quoting D.C. Code

§ 47-2853.04(a)).

      The registration requirement in Section 29-105.02 is very different from the

licensing requirement at issue in HVAC. Section 29-105.02 generally requires

entities conducting business in the District to register in order to “bring such

corporations under the supervision and the regulation of public officials . . . to the

end that the public may have the same information respecting their background and

financial standing . . . which is demanded of domestic corporations, and as a

consequence, also to render them amenable to ordinary legal process.” Hill-Lanham,

163 F. Supp. at 476.        Section 29-105.02’s registration requirement, therefore,

appears to encourage transparency and facilitate legal redress, not to directly protect

public health and safety.

      The contrast between general business-registration requirements such as

Section 29-105.02 and public-safety licensing requirements is illustrated by the

difference in how strictly those requirements are enforced. As we have noted,
                                          12

general business-registration requirements can often be satisfied retroactively, so

that a lawsuit filed by an unregistered business can proceed or be reinstated if the

business subsequently registers. York, 296 A.2d at 714. In contrast, public-safety

licensing requirements are strictly enforced, even where such enforcement “may

appear to be harsh and disproportionate.” HVAC, 201 A.3d at 1210. Thus, for

example, contracts entered into by a contractor who lacks such a license are treated

as void and unenforceable, and such contractors can neither recover in contract or

be compensated for the value of the work that was done, even if the other party was

aware of the contractor’s lack of a license. Id. Moreover, the subsequent obtaining

of a proper license does not legitimize work done during the period when the

contractor lacked the required license. See, e.g., Holiday Homes, Inc. v. Briley, 122

A.2d 229, 230-32 (D.C. 1956) (architect was not entitled to recover for work done

during period during which required license had lapsed).

      For the foregoing reasons, we conclude that HVAC does not govern this case

and that instead Ms. Hinojosa forfeited the defense of Kids Holdings’s lack of

registration by failing to raise that defense before judgment in this case.

          D. Relief from Judgment Under Super. Ct. Civ. R. 60(b)(6)

      The trial court granted full relief from judgment under Super. Ct. Civ.

R. 60(b)(6). We review that ruling to determine whether the trial court acted within
                                          13

the scope of its discretion. E.g., Puckrein v. Jenkins, 884 A.2d 46, 60 (D.C. 2005).

A court acts outside the scope of discretion when “it makes an error of law.”

Wendemu v. Tesema, 304 A.3d 953, 960 (D.C. 2023) (internal quotation marks

omitted).

      The trial court vacated the judgment based entirely on the legal conclusion

that Kids Holdings’s lack of registration was an unwaivable defense that warranted

relief from the judgment even though Ms. Hinojosa did not raise that defense before

judgment.    For the reasons we have explained, we disagree with that legal

conclusion. Ordinarily, we would remand the case for the trial court to exercise its

discretion based on correct legal principles. See, e.g., Long v. United States, 83 A.3d

369, 383 (D.C. 2013) (“Where a judge, in exercising . . . discretion, has

misapprehended the applicable legal principles, we often remand the case for

reconsideration under the correct standards.”) (ellipsis and internal quotation marks

omitted). Such a remand is not necessary, however, “if we can discern from the

record only one permissible option.” K.H., Sr. v. R.H., 935 A.2d 328, 335 (D.C.

2007). We reach that conclusion in the present case, because we see no permissible

basis for the trial court to vacate the judgment based solely on Kids Holdings’s lack

of registration. We note that Kids Holdings disputes that it was doing business in

the District so as to be subject to the registration requirement, but we have no need

to address that argument.
                                         14

      Ms. Hinojosa did not challenge Kids Holdings’s lack of registration until over

three years after final judgment. Ms. Hinojosa has not presented a reason for the

three-year delay in raising the issue, instead arguing only that Rule 60(b)(6) is “not

subject to time limits.” To the contrary, however, relief under Rule 60(b)(6) must

be sought “within a reasonable time” after the date of final judgment. Super. Ct.

Civ. R. 60(c)(1); see also Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship,

507 U.S. 380, 393 (1993) (“To justify relief under subsection (6), a party must show

extraordinary circumstances suggesting that the party is faultless in the delay.”)

(internal quotation marks omitted); Carrasco v. Thomas D. Walsh, Inc., 988 A.2d

471, 476 (D.C. 2010) (“[T]he passage of a year may render a [Rule 60(b)(6)] motion

untimely absent compelling reasons for the delay.”) (internal quotation marks

omitted).

      “Rule 60(b)(6) is properly invoked in extraordinary circumstances or where a

judgment may work an extreme and undue hardship . . . .” Hudson v. Shapiro, 917

A.2d 77, 85 (D.C. 2007) (internal quotation marks omitted). For the foregoing

reasons, we conclude as a matter of law that Kids Holdings’s failure to register does

not provide a permissible basis upon which to grant relief from judgment under Rule

60(b)(6) in this case.
                                         15

                        E. Voidness Under Rule 60(b)(4)

      Ms. Hinojosa argues that the judgment should also be vacated under Super.

Ct. Civ. R. 60(b)(4) (void judgments may be set aside). Ms. Hinojosa rests this

argument on the theory that the judgment was void because Kids Holdings’s failure

to register deprived the Superior Court of subject-matter jurisdiction. For reasons

we have already explained, however, we hold that Kids Holdings’s failure to register

did not deprive the Superior Court of jurisdiction. We therefore hold as a matter of

law that Rule 60(b)(4) provides no basis upon which to grant relief from judgment.

                                     F. Fraud

      Ms. Hinojosa also argues that the judgment should be set aside under Super.

Ct. Civ. R. 60(d)(2), which recognizes the trial court’s authority to “set aside a

judgment for fraud on the court.” Specifically, Ms. Hinojosa argues that Kids

Holdings committed a fraud upon the court by falsely claiming, in connection with

the effort to enforce the judgment, that the property at issue was not Ms. Hinojosa’s

home, when in fact Kids Holdings knew that the property was Ms. Hinojosa’s home

and was therefore exempt from attachment. We do not address that issue, however,

nor do we address the factual question whether Kids Holdings in fact committed

fraud on the trial court. Because the trial court granted relief to Ms. Hinojosa on

other grounds, the trial court did not address Ms. Hinojosa’s argument that Kids
                                           16

Holdings had committed fraud upon the court. We leave that issue to be addressed

by the trial court in the first instance on remand.

                                G. Motion to Quash

      As previously noted, the trial court granted the motion to quash for the sole

reason that Kids Holdings’s failure to register was an unwaivable defense that

entitled Ms. Hinojosa to relief from the judgment. The trial court therefore did not

address other arguments raised by the parties with respect to the motion to quash. In

light of our holding that Kids Holdings’s failure to register was not an unwaivable

defense entitling Ms. Hinojosa to relief from the judgment, we vacate the trial

court’s order granting the motion to quash the writ and remand for further

proceedings with respect to that motion.

      For the foregoing reasons, the judgment of the Superior Court granting relief

from judgment and quashing the writ is vacated, and the case is remanded for further

proceedings.

                                                          So ordered.