eNotes: Liability – June 2024 – Washington, DC

SIGNIFICANT CASE SUMMARIES

Washington, DC Case Summary

Unit Owners Ass’n of 2337 Champlain St. Condo v. 2337 Champlain St., LLC
District of Columbia Court of Appeals
No. 21-CV-0798

Decided: May 9, 2024

Plaintiffs’ claims against a developer were time barred through a contractual term providing for a shorter limitations period, which was not unreasonably short, or forbidden under the D.C. Condominium Act.

Background

In 2011, a developer purchased land in the District of Columbia to develop a condominium (“the Condominium”). The developer requested, and the Zoning Board granted, a special exception for the developer to exceed certain height limitations. A condominium adjacent to this project, called the Erie (“neighboring condo”), contested this grant. The developer and the neighboring condo settled their dispute in January 2013. As part of that settlement, the developer agreed to maintain a green screen of plants on its roof, preclude certain items being placed on the rooftop terraces, and agreed not to add structures on its roof above a certain height. In November 2013, the developer sold the Condominium to another developer that continued development. The restrictions agreed to were included in the Condominium’s bylaws on January 31, 2015, and recorded on May 26, 2016 before any units were sold. After these were recorded, the new developer began constructing rooftop cabanas, which the neighboring condo opposed. The parties reached a second settlement on June 17, 2016, that superseded the first agreement. The Condominium’s bylaws were amended on August 9, 2016, with certain new restrictions concerning the roof. During these negotiations, buyers purchased units in the Condominium. Closings occurred between September and October 2016. When they purchased the units, the purchasers signed a sales contract providing that they needed to bring any claims against the developer within one year of closing.

In 2018, the unit owners of the Condominium sued the developers and the neighboring condo over the restrictions agreed to before closing. They claimed they were not bound by the settlement agreement between the neighboring condo and the developer. They also claimed that the Condominium’s bylaws (with their restrictions) violated the Condominium Act. The Trial Court granted summary judgment, on grounds that the unit owners’ claims were time barred. The Trial Court also found that the unit owners had notice of the amended bylaws after closing. They appealed.

Holding

The Court of Appeals affirmed the Trial Court, finding that the unit owners’ common law fraud and statutory claims were both barred by the statute of limitations agreed to in the sales contract. The unit owners argued on appeal that they should have had the benefit of the three-year statute of limitations period that typically governs these kinds of claims. The Court of Appeals disagreed and held that statutes of limitations provide a default rule, but that they allow parties to choose shorter periods unless it’s unreasonably short, or a controlling statute prohibits the shorter period. The Court found that the D.C. Condominium Act did not preclude a shorter statute of limitations period, and it was not unreasonable. While the unit owners claimed fraud over the supposed failure to disclose the second settlement before closing, the record did not show that they were misled about the shorter limitations period, nor that the shorter period impaired their capacity to discover and pursue claims. Thus, their claims were time-barred.

Questions about this case can be directed to Madeline Creps at (202) 978-2049 or mcreps@tthlaw.com.