105 F. Supp. 914 | D. Minnesota | 1952
This is an action brought by the United States under the Housing and Rent Act of 1947, as amended, 50 U.S.C.A.Appendix, § 1881, et seq. It seeks to obtain a tern
The question presented, therefore, is: Should the tenant, L. D. Sargent, as to whom restitution is to be made to the extent of any excessive rent collected, be included as a party plaintiff so that defendants’ proposed counterclaim may be litigated as an offset against such restitution? The amount of the overcharge for restitution is alleged to be $603.75. The amount of the proposed offset is $125, alleged to have arisen by reason of wilful and wanton destruction of a portion of the leased premises by the tenant, L. D. Sargent.
In analyzing plaintiff’s complaint, it will be noted that it seeks to recover damages for three times the amount by which the payments accepted or received by defendants as rental exceeded the maximum rent which could be lawfully accepted for the premises in question. That right has inured to the plaintiff; by reason of the fact that the. tenant has not instituted an action for the recovery of excess rent or for liquidated damages. Consequently, the cause of action for such liquidated damages, which is the action at law, belongs to the United States, and as to that cause no counterclaim of offset as against the tenant can be prosecuted herein. Woods v. Selber, 5 Cir., 171 F.2d 900. However, in addition to this cause of action for liquidated damages, plaintiff proceeds in equity for injunctive relief and invokes the equitable arm of this Court in furtherance of this equitable proceeding to require the defendants to make restitution to the tenant to the extent of the excess rent collected. The prayer for restitution under these circumstances is an equitable adjunct to the injunction decree and is entirely independent of the Government’s right at law under the Act to recover liquidated damages, either single or treble. It would seem, therefore, that as to such restitution, if granted, the teachings of Porter v. Warner Holding Co., 328 U.S. 395, 66 S.Ct. 1086, 90 L.Ed. 1332, are controlling. On page 403 of 328 U.S., on page 1091 of 66 S.Ct., the court used the following language,
“* * * Should the court decide to issue 'a restitution order and should there appear to be conflicting claims and counterclaims between tenants and landlord as to the amounts due, the court has inherent power to bring in all the interested parties and settle the controversies or to retain the case until the matters are otherwise liti-' gated.”
Several lower courts have permitted offsets by the landlord in suits by the Government to compel restitution to tenants. Creedon v. Polis, D.C., 7 F.R.D. 652; Creedon v. Wilson, D.C., 10 F.R.D. 488; United States v. Steagall, D.C., 88 F.Supp. 98. And see also Woods v. Selber, 5 Cir., 171 F.2d 900; Woods v. York, 5 Cir., 171 F.2d 904; Creedon v. Banker, 5 Cir., 171 F.2d 904; Mattox v. United States, 9 Cir., 187 F.2d 406.
Certainly, the tenant, while not an indispensable party, is -an interested party and one who is entirely appropriate to be joined so that if restitution is granted, the rights between the landlord and the tenant as to any offset may be determined
It follows, therefore, that defendants’ motion will be granted, and L. D. Sargent, for the limited purposes indicated, will be joined as a party plaintiff and the title of the action will be amended to read “United States of America and L. D. Sargent, plaintiffs, v. John D. Dovolis and N. J. Dovolis.”
The ’ proposed answer and counterclaim of defendants filed herein as of February 19, 1952, may stand as their answer and counterclaim herein. A copy of this order and a copy of the answer and counterclaim must be served by defendants forthwith upon the tenant, L. D. Sargent.
A reply to defendants’ counterclaim may be filed within 20 days after the date of this order.
It is so ordered.
An exception is allowed to any parties aggrieved by this order.