Pajic v. Foote Properties, LLC
72 A.3d 140
| D.C. | 2013Background
- Pajic signed a 12-month lease with Foote Properties for an apartment in D.C.; lease included a clause (¶23) requiring tenant to pay landlord’s attorneys’ fees if landlord employed counsel to enforce the lease.
- Pajic moved out after ten months; Foote sued post-tenancy in Superior Court for unpaid rent and late fees, seeking attorneys’ fees under the lease.
- Pajic (pro se) counterclaimed, alleging he made cash rent payments and received rent abatements due to plumbing and A/C problems (breach of implied warranty of habitability), plus other claims he did not appeal.
- After discovery, trial court granted summary judgment for Foote on the rent claim, dismissed Pajic’s counterclaims under Iqbal, and awarded Foote ~$44,520 in attorneys’ fees based solely on the lease provision.
- The D.C. Court of Appeals held the fee-shifting clause violated 14 DCMR § 304.4 (bars lease provisions requiring tenants to pay owner’s legal fees) and reversed the fee award, and also reversed the grant of summary judgment and dismissal of Pajic’s habitability counterclaim due to disputed material facts and adequate pleadings by Pajic.
Issues
| Issue | Plaintiff's Argument (Foote) | Defendant's Argument (Pajic) | Held |
|---|---|---|---|
| Enforceability of lease fee-shifting clause | Clause authorizes recovery of attorneys’ fees incurred to collect rent; thus fees are contractually recoverable | Clause violates 14 DCMR § 304.4 and is void; trial court should not enforce it | Clause is void and unenforceable under 14 DCMR § 304.4; fee award reversed |
| Applicability of §304.4 to post-tenancy collections | §304.4 does not apply to post-tenancy suits or conditional fee clauses | §304.4 bars any fee-shifting provision placed in a lease when landlord–tenant relationship exists | §304.4 applies; no exception for post-tenancy or conditional language; provision barred |
| Whether summary judgment for landlord on unpaid rent was proper | Record supported undisputed rent owed; summary judgment appropriate | Genuine disputes of material fact exist (cash payments, rent abatements, undisputed credits); summary judgment improper | Summary judgment was improper; factual disputes require trial |
| Sufficiency of Pajic’s breach-of-habitability counterclaim | Counterclaim failed to plead breach or damages sufficiently under Iqbal | Verified pleadings and deposition alleged failures to repair statutory housing defects and alleged rent reductions/overpayments — sufficient for 12(b)(6) stage | Dismissal was error; Pajic’s verified allegations state a viable breach-of-implied-warranty claim |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard for plausibility)
- District of Columbia v. Helen Dwight Reid Educ. Found., 766 A.2d 28 (appellate discretion to consider unpreserved issues in exceptional cases)
- Potomac Dev. Corp. v. District of Columbia, 28 A.3d 531 (adoption of Iqbal standard and review of pleadings)
- Javins v. First Nat’l Realty Corp., 428 F.2d 1071 (implied warranty of habitability in residential leases)
- Fairman v. District of Columbia, 934 A.2d 438 (public-policy-based review of regulatory conflicts)
- Raskauskas v. Temple Realty Co., 589 A.2d 17 (verified complaint treated as affidavit for summary judgment purposes)