Brown v. M Street Five, LLC
56 A.3d 765
D.C.2012Background
- M Street Five obtained possession of the Property after a bench trial.
- Papillon executed a lease in 1995 and later entered a 2004 Second Extension Agreement through Brown, identifying Papillon Stores, Inc. as tenant.
- Papillon’s Maryland charter forfeited in 2002; DC revoked Papillon’s DC authority in 2004, but Papillon continued lease performance.
- M Street Five filed for possession in 2010; Brown argued the Second Extension was void due to Papillon’s lack of capacity to contract.
- Trial court held Papillon lacked capacity; Brown moved for relief based on newly discovered evidence and on estoppel theories; court awarded attorney’s fees to M Street Five under DC §29-101.139, which was later challenged.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Papillon had capacity to contract in 2004 | M Street Five: Papillon lacked capacity due to revoked charter. | Brown: Papillon valid via de facto or estoppel doctrines. | Second Extension void ab initio; Papillon had no capacity. |
| Whether estoppel bars M Street Five from challenging Papillon | M Street Five relied on Papillon as tenant. | M Street Five knew of revocation but proceeded as if Papillon valid. | Corporation by estoppel not applicable; estoppel does not validate contract. |
| Whether notice to quit was defective under DC law | Not dispositive; issue moot because contract void ab initio. | ||
| Whether attorney’s fees could be awarded under 29-101.139 despite void contract | M Street Five sought fees under the contract’s provision. | Brown argues no contract or fee-shifting basis due to void contract. | Judicial and equitable estoppel preclude fee recovery; no §29-101.139 relief. |
Key Cases Cited
- Robertson v. Levy, 197 A.2d 443 (D.C.1964) (constitutional and statutory limits on corporate acts; liability under §29-101.139 when acting without authority)
- Accurate Constr. Co. v. Washington, 378 A.2d 681 (D.C.1977) (equitable relief not available where revocation and knowledge exist)
- Golden Pisces, Inc. v. Fred Wahl Marine Constr., Inc., 495 F.3d 1078 (9th Cir.2007) (contract entirely void; cannot enforce attorney’s fees provision)
- Hill v. Cnty. Concrete Co., 672 A.2d 672 (Md.1996) (corporate estoppel not available when continued operation after revocation is inequitable)
- Truitt v. Miller, 407 A.2d 1073 (D.C.1979) (illustrates estoppel when corporation holds itself out as valid)