Court Opinion

ID: 4126553
Source: CourtListenerOpinion
Date Created: 2017-02-16 05:04:31.430675+00
Date Added: 2024-06-11T07:46:25.905969
License: Public Domain

District of Columbia
                                Court of Appeals
No. 14-CV-339
                                                                         FEB 16 2017
ROSITA JUUL,
                                   Appellant,

       v.                                                                CAR-5752-12

LYNETTE RAWLINGS,
                                   Appellee.

             On Appeal from the Superior Court of the District of Columbia
                                   Civil Division

       BEFORE: WASHINGTON, Chief Judge; FISHER, Associate Judge; and NEBEKER,
Senior Judge.

                                    JUDGMENT

               This case came to be heard on the transcript of record and the briefs filed,
and was argued by counsel. On consideration whereof, and as set forth in the opinion
filed this date, it is now hereby

              ORDERED and ADJUDGED that the trial court’s judgment is affirmed.

                                          For the Court:

Dated: February 16, 2017.

Opinion by Chief Judge Eric T. Washington.
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. 14-CV-339                        2/16/17

                            ROSITA JUUL, APPELLANT,

                                        V.

                         LYNETTE RAWLINGS, APPELLEE.

                         Appeal from the Superior Court
                          of the District of Columbia
                                (CAR-5752-12)

                      (Hon. Thomas J. Motley, Trial Judge)

(Argued September 15, 2015                             Decided February16, 2017)

      Kenneth C. Crickman, with whom Robert C. Cooper was on the brief, for
appellant.

      John H. Brillian for appellee.

      Before WASHINGTON, Chief Judge, FISHER, Associate Judge, and NEBEKER,
Senior Judge.

      WASHINGTON, Chief Judge:          Appellant Rosita Juul (“Ms. Juul” or

“Appellant”) appeals from the trial court’s order to enforce a settlement agreement

between appellant’s son, Soren Juul (“Mr. Juul”), and appellee Lynette Rawlings

(“Ms. Rawlings”). The settlement agreement effectuated the transfer of property

owned by Ms. Rawlings and Mr. Juul to Ms. Rawlings’ mother. Subsequently, the
                                         2

tenants residing on the property assigned their rights to purchase the property

under the Tenants Opportunity to Purchase Act (“TOPA” or the “Act”) to

appellant, who now asserts those rights on appeal. On March 12, 2014, the trial

judge entered an order enforcing the settlement agreement, finding that the transfer

of the property to Ms. Rawlings’ mother was not a “sale” under TOPA because it

was made pursuant to a “court-approved settlement” agreement and thus did not

trigger the tenants’ TOPA rights. Ms. Juul contends that the trial court erred in

reaching that conclusion because the trial court never knew the terms of the

settlement agreement, and therefore the settlement agreement could not have been

“court-approved.” While we agree that the settlement reached in this case was not

a “court-approved settlement” at the time of the dismissal, the trial court’s

subsequent order enforcing the settlement agreement cured the underlying

deficiencies from the original proceeding thus making this transfer of property in

this case not a “sale” under TOPA . Consequently, we affirm.

                                             I.

      On July 14, 2005, Mr. Juul gave his then-girlfriend, Ms. Rawlings, a fifty

percent interest in his home by way of quitclaim deed after receiving a notice of

foreclosure from his lender that the property was scheduled to be sold at public
                                         3

auction. Thereafter, Ms. Rawlings obtained a loan to stop the foreclosure sale and

to renovate the property. Mr. Juul and Ms. Rawlings resided together in the home

for two years but in November 2007, their relationship ended, and Ms. Rawlings

moved out. Mr. Juul continued to live in the home along with some tenants from

whom he collected rent. After Ms. Rawlings moved out of the home, she and Mr.

Juul entered into an agreement that Mr. Juul would make incremental payments to

purchase the property back from Ms. Rawlings over time. By January 2012,

however, Mr. Juul completely stopped making payments and Ms. Rawlings filed

suit against him seeking a partition sale of the property and damages relating to the

loans she acquired to complete renovations on the property.

      On August 19, 2013, Ms. Rawlings and Mr. Juul entered into a settlement

agreement, which required them to list the property with a professional realtor.

The realtor contacted the tenants on the property to notify them of their right to

purchase the property under the Tenants Opportunity to Purchase Act (TOPA).1

No contract had been executed between Mr. Juul and Ms. Rawlings and any third-

party buyers at the time. On October 31, 2013, just days prior to the scheduled

trial, the parties appeared in court for a pretrial conference, which resulted in a

      1
          D.C. Code §§ 42-3404.02 to -.14 (2016).
                                          4

second settlement agreement. The second settlement agreement stated the

following:

          1. Lynette Rawlings’ mother may submit a contract to
             purchase the property at a price of $455,000.00, and if
             she does so, the parties must ratify the contract on or
             before November 11, 2013.
          2. If the above contract does not go through, the parties
             agree to ratify a contract recommended by their realtor.
          3. Proceeds from the sale to Lynette Rawlings’ mother
             would go to Lynette Rawlings.
          4. Proceeds from any third-party contract would be split
             50/50 between Mr. Juul and Ms. Rawlings.
          5. Mr. Juul agrees to vacate the property by the closing
             date.
          6. Mr. Juul agrees that all rent collected will be paid to the
             mortgage company.
          7. To the extent not in conflict with this Agreement and
             settlement terms, the parties agree to be governed by the
             existing Agreement to Sell Property (the first agreement).
          8. All claims are dismissed with prejudice.

        The parties and their respective counsel signed the settlement agreement

and announced before the trial court that they had reached a settlement. The trial

court stated:

                The Court: All right. What do I need to do now?

                Mr. Shore (Ms. Rawlings’ attorney): We’ve agreed as
                part of our settlement, to dismiss this case.
                                        5

            The Court: This case is hereby dismissed.

            Mr. Pardo (Mr. Juul’s attorney): With prejudice, your
            Honor, so we’re all on the same page.

            The Court: Pursuant to the settlement agreement is
            dismissed with prejudiced [sic].  Pursuant to the
            settlement agreement.

            Mr. Shore: Correct.

            The Court: That is if you don’t abide by the settlement
            agreement you’ll be back in the courthouse. Maybe not
            in this court, but in the courthouse.

      Immediately following the execution of the settlement agreement,

Ms. Rawlings’ mother submitted a contract to purchase the Property for

$455,000.00. Ms. Rawlings and Mr. Juul ratified the contract and scheduled

closing for February 2014. The following day, the parties’ realtor sent all tenants

on the property a second notice of a first right to purchase the home under TOPA.

The tenants assigned their right to purchase under TOPA to appellant, Mr. Juul’s

mother, only a few days after the parties ratified Ms. Rawlings’ mother’s contract.

On December 24, 2013, Ms. Rawlings filed a pro se “Motion to Petition

Reopening the Case” in the trial court alleging the settlement agreement was

conducted in bad faith. Ms. Rawlings alleged in her motion that during settlement

negotiations she specifically inquired about the tenants on the property, but that
                                         6

Mr. Juul’s attorney stated that all tenancies on the property would be voluntarily

terminated and TOPA would not be relevant. Ms. Rawlings stated that she would

not have entered into the settlement if she had known the tenants were going to

assign their rights to appellant. Ms. Rawlings requested that the trial court vacate

the settlement agreement and reopen the case. Thereafter, the trial court entered an

order granting Ms. Rawlings’ Motion to Reopen the Case. The trial court did not

vacate the settlement agreement but instead stated that the case was reopened for

“purposes of enforcing the settlement agreement.” On January 23, 2014, the Court

held a status hearing on the Motion to Reopen the Case. During that hearing, the

Court read the eight terms of the settlement agreement and Ms. Rawlings,

representing herself, stated that she was misled about the tenants on the property

but that she did not believe that TOPA applied because the transfer was both an

“interfamilial transfer” and “pursuant to a Court-approved settlement agreement.”

The Court acknowledged this possibility and ordered the parties to return in one

month.

      Ms. Juul intervened into the case alleging that she was a necessary party

because the tenants assigned to her their right to purchase the property. Ms.

Rawlings, now represented by counsel, subsequently filed a Motion to Enforce the

Settlement Agreement where she argued that the transfer of property to her mother
                                         7

pursuant to the settlement agreement was not a “sale” pursuant to TOPA because

the transfer of the property was an inter-vivos transfer and because the transfer was

made pursuant to a court-approved settlement.

      The trial court held a hearing on Ms. Rawlings’ motion and granted the

Motion to Enforce the Settlement Agreement on the grounds that the transfer under

the settlement agreement did not constitute a sale under TOPA because the transfer

was made pursuant to a “court-approved settlement.” The court also ordered Mr.

Juul to cooperate with the sale of the property to Ms. Rawlings’ mother and

ordered the parties to comply with the remaining terms of the settlement

agreement. During the hearing, the trial court judge asserted that by dismissing the

case “pursuant to the settlement agreement” he had approved the settlement

agreement.    He also expressed concern that the purposes of the settlement

agreement were being frustrated and that the original litigation was not contrived

to circumvent TOPA rights. Ms. Juul filed a timely appeal.

                                             II.

      Despite Ms. Juul’s assertion that the trial court exceeded its authority when

it granted Ms. Rawlings’s motion to enforce, it is well settled in the District, and
                                          8

everywhere else, for that matter, that once a court has reopened a case, it has the

power to enforce settlement agreements that are pending before it. Confederate

Mem’l Ass’n v. United Daughters of the Confederacy, 629 A.2d 37, 39 (D.C. 1993)

(citations omitted).     However, “a settlement agreement should be enforced

according to its terms and not be modified in favor of either party, absent some

compelling reasons.” Fields v. McPherson, 756 A.2d 420, 426 (D.C. 2000) (citing

Camalier & Buckley, 667 A.2d 822, 825 (D.C. 1995)). Ms. Juul contends that the

settlement agreement was not “court-approved” and therefore, the trial court erred

when it exempted the instant sale of property from TOPA’s requirements. 2 In

order to determine whether the trial court erred by finding that the transfer was

made pursuant to a “court-approved settlement agreement,” and that TOPA,

therefore, did not apply, we must first determine whether this transaction qualifies

as a sale under TOPA.3

      2
          Ms. Juul also contends that declaratory relief can only be granted for
justiciable claims and that Ms. Rawlings presented no justiciable claim to the court
concerning allegations of fraud in the inducement of the settlement agreement.
However, this contention is belied by the record. Despite appellant’s claims,
Ms. Rawlings argued allegations of fraud during the status hearing after the
reopening of the case, and those allegations were sufficient to create a justiciable
issue. Appellant offers no basis for us to conclude otherwise.
      3
       Appellant also contends that the trial court erred by finding that the transfer
between the parties to Ms. Rawlings’ mother did not constitute a “sale” under
TOPA because it was pursuant to an inter-vivos transfer. See D.C. Code § 42-
3404.02 (c)(2)(B) (2016). However, the trial court did not conclude that TOPA did
                                                                       (continued…)
                                         9

      TOPA requires that before an owner of a property may “sell” the property or

transfer the property through a “sale,” the owner must provide any tenants of the

property an opportunity to purchase the property at a price and terms that represent

a bona fide offer of sale. D.C. Code § 42-3404.02 (a) (2016). The TOPA statute

explicitly defines the words “sale” and “sell,” id. at 42-3404.02 (c)(1), and also

makes clear what does not constitute a sale under the statute. Id. at 42-3404.02

(c)(2). If there is no “sale” as defined by the statute, the owner is not required to

provide any tenants with an opportunity to purchase the property.

      Under TOPA, a transfer pursuant to court order or a court-approved

settlement is not a sale. Id. at 42-3404.02 (c)(2)(M). However, TOPA does not

define what constitutes a “court-approved settlement” and we also have not had the

opportunity to define the term in this or any other relevant context. We note that

(…continued)
not apply to this transaction because it was an inter-vivos transfer. The trial court
based its decision that the transfer was not a “sale” on its finding that the
settlement agreement was a “court-approved settlement agreement.” Because we
review for trial court error, see Sullivan v. United States, 721 A.2d 936, 937 (D.C.
1998), and the record does not support appellant’s contention that the trial court’s
decision was based on a finding that this property exchange was exempt from
TOPA requirements because it was an inter-vivos transfer, this issue is not
properly before us.
                                        10

the Council, in enacting TOPA, viewed court orders and court-approved

settlements as being on equal footing when it came to excluding property transfers

from TOPA’s reach. Therefore, because TOPA was passed to protect tenants’

rights, a “court-approved” settlement, like a court order, should have the

imprimatur, or in other words, the formal endorsement of the court behind it. To

conclude otherwise would open the door to the possibility of disingenuous lawsuits

filed by individuals hoping to evade their TOPA obligations by subsequently

agreeing to settle their disputes and then asking courts to dismiss the pending

lawsuit. As we have repeatedly acknowledged, “the Council . . . enacted TOPA to

discourage the displacement of tenants through the sale of rental properties and to

provide tenants opportunities for home ownership, without interfering with a

landlord’s property rights.” Richman Towers Tenants’ Ass’n v. Richman Towers

LLC, 17 A.3d 590 (D.C. 2011) (quoting Malik Corp. v. Tenacity Group, LLC, 961
A.2d 1057, 1062 (D.C. 2008)). However, TOPA’s exemption for “court-approved

settlement[s]” illustrates the equally important policy of not unreasonably

interfering with an owner’s property right when that right is the subject of a

binding settlement agreement, which our judicial system encourages, entered into

during the course of litigation. See Gabriellan v. Gabriellan, 473 A.2d 847, 850

(D.C. 1984) (“Public policy encourages the drafting of settlement agreements; if

valid, they are binding on the parties.”) (citations omitted).    Therefore court-
                                            11

approval is the limiting principle, and thus we must determine what such approval

requires, as it is not defined by the statute.

       Whether the settlement agreement is “court-approved” is a mixed question

of law and fact “that calls for a mixed standard of review.” See generally Fed.

Mktg. Co. v. Virginia Impression Prods. Co., 823 A.2d 513, 526 (D.C. 2003)

(citation omitted). We review questions of law de novo. See Davis v. United

States, 564 A.2d 31, 55 (D.C. 1989) (en banc). However, the trial court’s factual

determinations will be accepted unless clearly erroneous. Fed. Mktg. Co., 823
A.2d at 526. Despite the trial court’s finding that the settlement agreement was

“court-approved” when the trial court dismissed the case “pursuant to the

settlement agreement,” Ms. Juul argues that the trial court could not have approved

the agreement because the court did not have sufficient facts before it to make an

informed judgment about whether or not to approve the agreement. Ms. Juul

points out that the trial court never read over the terms of the agreement and

neither inquired about the scope of the agreement nor questioned the parties about

the circumstances that led to the agreement before granting the motion to dismiss

the case with prejudice pursuant to that agreement. In essence, Ms. Juul argues

that the trial court’s finding that the settlement was court-approved is erroneous

because the case is not supported by substantial evidence in the record. Despite the
                                         12

trial court’s finding that the settlement was court-approved because it had been

dismissed “pursuant to the settlement agreement,” we are not convinced on this

record that the trial court had sufficient knowledge of, and familiarity with, the

terms and conditions of the settlement agreement to make the kind of informed

judgment that is understood to typically underlie court orders.          See Weil v.

Markowitz, 829 F.2d 166, 171-72 (D.C. Cir. 1987) (trial court’s approval of

settlement may be reversed if shown that the trial court did not have sufficient facts

before it to make an informed judgment).

      While this issue is one of first impression in our court, a fair reading of our

case law is that settlement agreements are not court-approved unless the trial court

takes some steps to become familiar with, and to understand, the terms of the

settlement agreement before approving it. For example, in Shepherd Park Citizens

Ass’n v. Gen. Cinema Beverages, 584 A.2d 20, 23 (D.C. 1990), we upheld a trial

court’s approval of a settlement agreement after it considered the extent of

investigation, proof problems, strength of defenses, costs of litigation, good faith,

possible collusion, the experience of counsel, and the extent of opposition to the

settlement. Likewise, in Boyle v. Giral, 820 A.2d 561 (D.C. 2003), we upheld a

trial court’s approval of a class action settlement agreement after the trial court

held a hearing on the fairness of the agreement. Thereafter, in Tsintolas Realty Co.
                                         13

v. Mendez, 984 A.2d 181 (D.C. 2009), we reviewed whether there was a material

breach in a settlement agreement that was approved by the trial court without

objection after it read the settlement agreement out loud in open court.

      In each of the aforementioned cases, this court noted that the trial court

either read or inquired about the terms of the settlement agreement before giving it

“court approval.” We note that none of the cases mentioned above explicitly

address what is required for a settlement to qualify as “court-approved,” but it goes

without saying that in order for a trial court to approve a “settlement agreement,”

the trial court, at a minimum, must be aware of the terms of the settlement

agreement.

      Here, the record prior to reopening the case does not support the trial court’s

subsequent finding that its original dismissal of the case was based on its approval

of the parties’ settlement agreement because it does not appear from the record that

the trial court took any steps to become familiar with the terms of the settlement

agreement prior to granting the parties’ request to dismiss the case with prejudice.

Instead, it appears that the trial court dismissed the case without even a cursory

review of the agreement or any discussion with the parties about the facts and

circumstances that led them to court or to reach the agreement. We hold that to
                                        14

qualify as a court-approved settlement, there must be some record support that the

trial court had an understanding of the terms of the agreement and subsequently

ratified those terms when it approved the settlement agreement. Here, because

there is no record evidence that the trial court ever read or otherwise became

knowledgeable about the terms of the settlement agreement before dismissing the

case between Ms. Rawlings and Mr. Juul, the settlement agreement in this case

was not “court-approved” at the time of the dismissal, and thus the trial court’s

finding of such was erroneous.

                                       III.

      While the settlement agreement in this case was not “court-approved” at the

time of the dismissal, this alone does not resolve the matter before us because the

trial court, after reopening the case and having all of the facts before it,

subsequently enforced the settlement agreement and entered an order directing the

transfer of property to Ms. Rawlings’ mother.

      To successfully challenge the trial court’s subsequent enforcement of the

settlement agreement, Ms. Juul “must show that the trial court abused its

discretion: this generally requires a showing either that the agreement in question
                                         15

was so manifestly unfair as to preclude judicial approval, or that the court did not

have sufficient facts before it to make an informed judgment.” Weil, 829 F.2d at

172 (internal citations omitted). None of Ms. Juul’s arguments on appeal allege

that the settlement agreement was so manifestly unfair as to preclude judicial

approval.   Thus the only question remaining is whether the trial court had

sufficient facts before it to make an informed judgment about whether to approve

the settlement agreement.

      On March 12, 2014, on review of Ms. Rawlings’ motion to enforce and after

hearing arguments concerning the settlement agreement and inquiring as to how

the tenants came to assign their rights to appellant, the trial court issued an order

enforcing the original settlement agreement. The record amply demonstrates that

at the time it entered the enforcement order, the trial court was aware of, and

familiar with, the terms and conditions of the settlement agreement. In addition,

the trial court heard argument on the issue of enforcement and possible frustration

of the agreement by Mr. Juul before granting Ms. Rawlings’ Motion to Enforce.

Under TOPA, a “sale” does not include “a transfer pursuant to court order,” D.C.

Code § 42-3404.02 (c)(2)(M) (2012 Repl.), and therefore, once the trial court

ordered Mr. Juul to “cooperate with the sale of the property to plaintiff’s [Ms.

Rawlings’] mother pursuant to the October 31, 2013, Settlement Agreement” and
                                         16

ordered the parties to “comply with the remaining terms of the October 31, 2013

Settlement Agreement,” the trial court cured its original error of not making

sufficient inquiry before approving the settlement at the time of the dismissal. See

Brady v. Fireman’s Fund Ins. Cos., 484 A.2d 566, 568-69 (D.C. 1984) (trial court

erred by not providing notice to attorney of potential liability for not complying

with discovery, but then cured its error when attorney filed, and court considered, a

Rule 60 (b) motion).

      Similarly, in this case, the trial court’s erroneous belief that it had approved

the settlement agreement at the time of the dismissal was cured by its subsequent

review, approval, and enforcement of the terms and conditions of the settlement

agreement with full knowledge of the circumstances surrounding the dispute

between Ms. Rawlings and Mr. Juul.

      Ms. Juul argues that Ms. Rawlings’ motion to enforce was a request to have

the tenants “stripped of their rights” and that the trial court could not subsequently

issue an order that deprived Ms. Juul of the tenants’ assigned TOPA rights.

However, the TOPA statute does not specify when a trial court order must be

rendered in connection with a transfer of property to be exempt from the definition
                                        17

of a “sale” and thus does not preclude our holding today. 4 When a trial court

reassumes jurisdiction it may decide whether to enforce a settlement agreement

through a court order. 5 Our holding today is consistent with similar situations

where a trial court erroneously renders an order and then subsequently cures its

own error in a new order. See Berry v. Berry, 277 P.3d 771, 776 (Alaska 2012)

(trial court’s error in granting temporary orders before considering a party’s

argument was cured by reconsideration of that order in light of those arguments).

Upon review of the settlement agreement and after argument concerning the

implications of TOPA on the agreement, the trial court in this case decided to

enforce the agreement. Ms. Juul does not point to any changed circumstances that

occurred involving the tenants between the date of the trial court’s original order

      4
         Moreover, it is apparent from the record that the tenants’ TOPA rights had
not vested at the time the tenants “transferred” those rights to Ms. Juul. TOPA
“rights” only vest upon the execution of an agreement that meets the statutory
definition of a “sell” or “sale.” However, there are many exceptions to the general
rule enumerated in the statute, of which a court-approved settlement is one. See
D.C. Code § 42-3404.02 (b), (c)(1), (c)(2)(A) to (c)(2)(N) (2013 Repl.). But for a
technical defect in the process used by the court to approve the settlement
agreement, a defect that was subsequently cured, appellant never enjoyed TOPA
rights to the property because the tenants were never entitled to a right of first
refusal.
      5
          Ms. Juul also argues that there was nothing for the trial court to enforce
because her son complied with the terms of the agreement up until that point.
However, given the trial court’s findings on possible fraud, it was well within its
jurisdiction to decide whether to enforce the agreement and order Mr. Juul to
comply with the remaining terms of the agreement.
                                        18

dismissing the lawsuit pursuant to the settlement agreement and the trial court’s

subsequent order to enforce compliance with the settlement agreement that put the

tenants in a materially different position with respect to the enforcement of their

TOPA rights. As the Act makes clear, a tenant’s potential right of first refusal is

not so absolute that it may interfere with the judicial process and the court’s

authority to enforce contracts, including settlement agreements. When the trial

court acts to ensure that a party does not intentionally frustrate the purpose of a

settlement agreement procured through litigation, such action is not erroneous

under TOPA.

                                         IV.

      In summary, we hold that while the trial court erroneously found that the

settlement agreement was a “court-approved settlement agreement” at the time of

the dismissal of the case, the trial court subsequently cured its error when it

became familiar with the terms of the agreement and subsequently ratified it by

ordering that the agreement be enforced. Therefore, we affirm the trial court’s

judgment.

                                               So ordered.