2301 M Street Cooperative Association v. Chromium, LLC
209 A.3d 82
| D.C. | 2019Background
- 1980 lease granted Cooperative long-term air-rights; lease contains a five‑year rent‑escalation clause tied to CPI and defines “Lease Commencement Date” as the date of the lease (May 6, 1980).
- After conveyance of the residential section in December 1981, successor landlords (Pedas Group via Lenkin management) for ~30 years calculated escalations using a different formula (the “Historic Method”) and treated December 8, 1981 as the effective commencement date.
- In 2007 Chromium acquired the property, refused to follow the Historic Method, and insisted on the lease’s textual formula (the “Textual Method”) and the May 6, 1980 commencement date for future adjustments.
- Trial court held the escalation clause unambiguous, adopted the Textual Method prospectively beginning with the 2010 adjustment, and found the Lease Commencement Date to be May 6, 1980.
- Chromium attempted post‑trial to recalculate prior escalations (which would raise base rent dramatically); the trial court barred retrospective recalculation. Both parties appealed; the court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument (Cooperative) | Defendant's Argument (Chromium) | Held |
|---|---|---|---|
| Proper method to calculate rent escalations | Lease ambiguous; historical practice shows parties intended Historic Method | Clause unambiguous; must apply Textual Method as written | Textual Method is unambiguous and governs going forward |
| Lease Commencement Date | Should be Dec. 8, 1981 (delivery/conveyance date used historically) | Should be May 6, 1980 (date lease signed) | "Lease Commencement Date" unambiguously means May 6, 1980 |
| Whether long‑standing practice modified the lease | Repeated decades‑long use of Historic Method and acceptance by Cooperative implicitly modified the contract | No mutual consent to modify; evidence shows misapplication, not modification; successor not bound absent notice | Modification argument waived at trial and, on the merits, insufficient evidence of mutual assent; no enforceable modification against Chromium |
| Retroactive recalculation of past escalations | (Cooperative sought to prevent retroactivity) | Chromium sought to recalculate prior periods to reset base rent higher | Trial court properly exercised equitable discretion to bar retroactive recalculation; Textual Method applies prospectively only |
Key Cases Cited
- Sobelsohn v. Am. Rental Mgmt. Co., 926 A.2d 713 (D.C. 2007) (real‑property leases analyzed under general contract principles)
- Dyer v. Bilaal, 983 A.2d 349 (D.C. 2009) (unambiguous contract terms control; extrinsic intent irrelevant absent fraud or mistake)
- Abdelrhman v. Ackerman, 76 A.3d 883 (D.C. 2013) (parol evidence rule limits contract interpretation to the plain text when unambiguous)
- Bolle v. Hume, 619 A.2d 1192 (D.C. 1993) (parol evidence inadmissible to show intent contrary to clear written contract)
- Clark v. Clark, 535 A.2d 872 (D.C. 1987) (parties retain the right to modify a written contract by subsequent agreement; written no‑oral‑modification clause does not preclude modification by later assent)