City Center Real Estate, LLC v. 1606 7th Street NW, LLC, 18-CV-95 & 18-CV-271

Background:

Mixed-use building at 1606 7th St. NW: Gabre operated a grocery on the ground floor and occupied one of two upstairs rooms; he subleased the larger upstairs room to two tenants (Woldegebriel and Temesgen).
Owner McCormack contracted to sell; realtor issued TOPA offers. Woldegebriel assigned his TOPA rights to City Center; Gabre assigned his purported TOPA rights to Alex Associates (Devin Hinton) for $30,000; Alex Associates’ contract was assigned to 1606 LLC (Hinton family entity).
City Center sued, alleging the parties mischaracterized Gabre as a residential tenant so Alex Associates/1606 LLC could obtain the sale; claims included TOPA violations and torts.
At summary judgment the Superior Court found no genuine dispute that Gabre used the smaller upstairs room as a residence and granted judgment for defendants.
On appeal the D.C. Court of Appeals held there were genuine disputes of material fact about (1) Gabre’s actual residential use, (2) whether the smaller room had residential characteristics (bath/kitchen/access), and (3) landlord knowledge/acquiescence; the court reversed and remanded.
The Court also held that the larger-room subtenants had independent TOPA rights that could be assigned to City Center even if a factfinder found Gabre was not a residential tenant; the award of TOPA-based costs was vacated.

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Gabre was a TOPA "tenant" (residential) entitled to TOPA rights	Gabre was effectively a commercial tenant / not actually residing in the upstairs room (e.g., lived in Virginia, family not primarily there)	Gabre actually used the smaller room as a residence (slept there several nights, had bedding/clothes) and owner issued TOPA notice	Genuine factual disputes exist on actual use, unit characteristics, and landlord acquiescence — summary judgment improper; remand for factfinding
Whether summary judgment for defendants was appropriate	There were contradictory statements, evidence of non-residence, and unit lacked residential features making summary resolution improper	Deposition and admissions supported residential use and realtor/owner treated him as a tenant	Court reversed summary judgment because material disputes of fact precluded deciding TOPA tenancy as a matter of law
Whether subtenants’ TOPA rights depend on Gabre’s TOPA status (nemo plus juris argument)	If Gabre lacked TOPA rights, he could not convey TOPA rights to subtenants/assignees; initial third-party contract would control	Statutory TOPA protections include subtenants independently; subtenants’ rights do not derive solely from sublandlord’s proprietary title	Held that subtenants (Woldegebriel/Temesgen) had independent TOPA rights and City Center’s assignment from them can stand even if Gabre is non-residential
Remedies / costs based on TOPA fees and damages	City Center sought equitable relief and damages; appellees argued no damages and thus no relief; appellees sought to uphold costs and contract	Defendants relied on TOPA fee provision and argued initial contract could bind parties if no TOPA	Court vacated TOPA-based costs award and remanded for further proceedings on remedies; left open equitable relief (e.g., specific performance) pending factfinding

Key Cases Cited

Allman v. Snyder, 888 A.2d 1161 (D.C. 2005) (summary judgment standard; review de novo)
Cormier v. District of Columbia Water & Sewer Auth., 959 A.2d 658 (D.C. 2008) (summary judgment / viewing facts in light most favorable to non-movant)
Revithes v. District of Columbia Rental Hous. Comm’n, 536 A.2d 1007 (D.C. 1987) (fact-based inquiry into actual residential use and unit characteristics)
Ontell v. Capitol Hill E.W. Ltd. P’ship, 527 A.2d 1292 (D.C. 1987) (actual use controls commercial vs. residential classification)
Bellmore v. Baum, 68 A.2d 588 (D.C. 1949) (physical features—bathroom, kitchen, meters—relevant to residential determination)
Pelkey v. Endowment for Cmty. Leadership, 841 A.2d 757 (D.C. 2004) (commercial use not covered by TOPA)
Redman v. Potomac Place Assocs., 972 A.2d 316 (D.C. 2009) (TOPA tenancy requires "lawful" possession)
Adm’r of Veterans Affairs v. Valentine, 490 A.2d 1165 (D.C. 1985) (statutory protections construed to effectuate remedial purpose; tenant protections may apply despite technical property-law defects)
Richman Towers Tenants’ Ass’n v. Richman Towers LLC, 17 A.3d 590 (D.C. 2011) (TOPA remedial purpose; courts consider substance over form)