REID, Associate Judge:
Appellant Lucille Kelley filed a complaint for monetary damages and injunctive relief against appellee Broadmoor Apartments, Inc., a cooperative housing association. She challenged the imposition on non-resident owners of a surcharge on the rental of their apartments. She alleged that the surcharge violated her Perpetual Use and Equity Contract with the Broadmoor, and the bylaws of the cooperative. The trial court granted summary judgment to the Broadmoor. We affirm.
FACTUAL SUMMARY
In 1948, the Broadmoor apartments, located at 3601 Connecticut Avenue, N.W., became a non-profit housing cooperative known as Broadmoor Cooperative Apartments, Inc. Broadmoor sold "perpetual use and equity contracts" to residents and potential residents. Appellant Lucille Kelley and her now deceased husband acquired a perpetual use and equity contract for Apartment 613 on November 28, 1958, as tenants by the entirety. For over thirty-five years, Mrs. Kelley was a resident of Broadmoor. In April 1994, at the age of 95, she moved to a retirement home.
Mrs. Kelley wanted to rent her apartment to her niece, and sought the written consent of the Broadmoor Board of Directors, as required by § 6(d) of the contract, and § 62 of Broadmoor's bylaws. Section 6(d) of the contract provided in pertinent part:
Section 62 of the bylaws specified in relevant part that:
As of May 6, 1991, the fee imposed for the leasing of an apartment was "$100.00 charged to the owner; $100.00 placed in escrow by leasee renting the apartment." The owner was subjected to a lease renewal charge of $100.00 every six months.
Approximately three months after Mrs. Kelley sought to lease her apartment to her niece, the Board voted to eliminate the lease renewal fee. In its place the Board decided to impose a surcharge of 5% on the monthly operating assessment of owners for each rented apartment, and an escalating additional 5% surcharge on the assessment each rental year until the maximum of a 25% surcharge was reached in the fifth year. The Board's intent, as later articulated by its President, was "to promote owner occupancy, maintain the value of each owner's investment in his or her home, and ensure a consistently high quality of life for Broadmoor residents." On July 22, 1994, the Board informed resident members of the Broadmoor that the surcharge would become effective on September 1, 1994.
Mrs. Kelley filed a complaint in the trial court on August 30, 1994. Her complaint alleged that the surcharge (1) breached the terms of the contract; (2) breached the bylaws; (3) constituted age discrimination, in violation of D.C.Code §§ 1-2501 et seq.; (4) constituted tortious interference with her contract; and (5) "breached the Board's fiduciary duty to operate and manage the Broadmoor in a fair, reasonable and nondiscriminatory manner." Mrs. Kelley sought injunctive relief and monetary damages.
On December 7, 1994, the trial court ordered the Board to approve Mrs. Kelley's niece's lease and allow her to occupy Apartment 613. In addition, Mrs. Kelley was ordered to pay the rental surcharge, without prejudice to her continuing challenge to its validity. Mrs. Kelley moved for summary judgment on February 16, 1995. On March 1, 1995, the Broadmoor opposed Mrs. Kelley's motion, and filed a cross-motion for partial summary judgment. The trial court issued an order dated March 9, 1995, denying Mrs. Kelley's motion for summary judgment and granting the Broadmoor's motion as to
Subsequently, the parties stipulated to the dismissal of count three of Mrs. Kelley's complaint, without prejudice.
On May 5, 1995, the Broadmoor moved for summary judgment on the counts concerning the alleged breach of the bylaws, the alleged invalid exercise of power by the Board, and the alleged breach of fiduciary duty. On May 25, 1995, Mrs. Kelley filed an opposition and cross-motion. In addition, she filed a "renewed motion for summary judgment." The "renewed motion" was opposed on the ground of untimeliness. In an order dated June 1, 1995, the trial judge granted Broadmoor's motion, stating:
The trial court denied Mrs. Kelley's renewed motion for summary judgment in an order dated June 30, 1995. The order specified that "for reasons stated in defendant's opposition, the motion is both untimely and without merit." On June 30, 1995, Mrs. Kelley appealed the trial court's orders dated March 9, 1995, June 1, 1995, and June 30, 1995.
ANALYSIS
Mrs. Kelley argues that: (1) the surcharge violates her "`valuable equity right' of rental" under the contract; (2) section 45 of the bylaws
Standard of Review
"In reviewing a motion for summary judgment, `we must assess the record independently . . . [and view it] in the light most favorable to the party opposing the motion'." Walton v. District of Columbia, 670 A.2d 1346, 1353 (D.C.1996) (referencing Colbert v. Georgetown Univ., 641 A.2d 469, 472 (D.C.1994) (en banc)). See also Young v. Delaney, 647 A.2d 784, 788 (D.C.1994). "We will affirm the entry of summary judgment if `there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law'." Holland v. Hannan, 456 A.2d 807, 814 (D.C.1983) (quoting Super. Ct. Civ. R. 56(c)). Moreover, "summary judgment is appropriate where a contract is unambiguous since, absent such ambiguity, a written contract duly signed and executed speaks for itself and binds the parties without the necessity of extrinsic evidence." Id. at 815 (referencing Glekas v. Boss & Phelps, Inc., 437 A.2d 584, 587-88 (1981)). Whether a contract is ambiguous is a question of law. Id. (referencing Clayman v. Goodman Properties, Inc., 171 U.S.App. D.C. 88, 96, 518 F.2d 1026, 1034 (1973)). We
The Question Of A Valuable Equity Right Of Rental
Mrs. Kelley claims she has a "valuable equity right"—a "full proprietary right []"—of rental under the contract which the surcharge violates. We disagree. Neither the perpetual use contract nor the bylaws grant an equity right of rental to Mrs. Kelley in the sense she means: an essentially unrestricted right to rent subject only to a qualified right of the Board to approve the tenant. The words of each document are clear and unambiguous in giving owner's only a highly restricted right to rent. Section 6(d) of the perpetual use contract conditions the owner's lease or the sub-lease of an apartment on "the written consent of the Co-operative." Section 62 of the bylaws states that "[t]he control by the Board of Directors of the right of occupancy extends to leasing or subleasing by either resident or equity members" and "[a]pplication for authority to lease or sublease shall be made to the Board of Directors in the form and upon such terms as it may, from time to time, prescribe." While § 61 of the bylaws, which concerns the sale or transfer of a contract, recognizes that "valuable equity rights arise from the purchase of use contracts,"
Although it construed the Broadmoor's perpetual use and equity contract, Abbot involved a different issue—the status or characterization of purchasers of cooperative apartments, under the Emergency Rent Act. There the trial court (affirmed on appeal) concluded that the purchasers were "landlords... entitled ... to the possession of apartments purchased by them for their personal use and occupancy." 81 F.Supp. at 540. As such, they had the right to oust from their purchased apartments tenants by sufferance who had resided in the building prior to conversion. Although the trial court in Abbot cited certain indicia of ownership, none of these indicia included a valuable equity right of rental.
Mrs. Kelley also relies upon an affidavit submitted by Edmund C. Flynn who, together with his father, converted the Broadmoor into a cooperative. He asserted that in 1947 and 1948, "it was understood and agreed that [the original] members [of the cooperative] had the right to rent their apartment units subject to the provision that the persons
Even if the Flynn affidavit established the intent of the Broadmoor to convey a valuable equity right of rental through the contract, it constitutes extrinsic evidence and may not be used to vary the terms of an unambiguous contract. "Extrinsic evidence of the parties' subjective intent may be resorted to only if the document is ambiguous." 1010 Potomac Associates v. Grocery Mfrs. of Am., Inc., 485 A.2d 199, 205 (D.C.1984). Since the contract is not ambiguous, the Flynn affidavit may not be used to vary its terms.
For the foregoing reasons, we conclude that the trial court did not err in determining that the contract confers no valuable equity right to rent apartment 613 on Mrs. Kelley. Moreover, we find no basis for such a right in either the Abbot decision or the bylaws. Both the contract and the bylaws condition the rental of an apartment on the consent of the Board. Accordingly, we affirm the trial court's order dated March 9, 1995.
The Bylaws, Fiduciary Duty and Powers Of The Board
Mrs. Kelley contends that the Board violated the Broadmoor's bylaws, breached its fiduciary duty to its members, and exceeded its powers in imposing a surcharge to discourage rentals. The Broadmoor points to the broad powers given to the Board by both the contract and the bylaws. Mrs. Kelley relies on §§ 47 and 68 of the bylaws to advance her position. Both of these sections preclude the Board from enacting rules that are "inconsistent with" or "adversely affect" rights under the contract. Since, as we have determined, the contract grants no valuable equity right of rental, the surcharge could not be inconsistent with or adversely affect such a non-existent right.
Sections 21, 47, 50, 61 and 62 of the bylaws make it exceedingly clear that the Board has broad powers with respect to the management and operation of the Broadmoor. Section 21 states:
Section 47 provides:
Mrs. Kelley makes no argument based upon § 50 of the bylaws which addresses the method for calculating and imposing monthly and special assessments on members of the cooperative.
Section 62, set forth above, conditions leasing and subleasing on the approval of the Board.
The question before us is whether the surcharge imposed by the Board extended beyond these broad powers and represented a breach of fiduciary duty owed to Mrs. Kelley. The Broadmoor argues that according to D.C.Code § 29-1141, this question must be resolved in accordance with the business judgment rule because it is a Delaware corporation. D.C.Code § 29-1141 (1991 repl.) reads in pertinent part:
In Snowden v. Benning Heights Co-op., Inc., 557 A.2d 151, 152 (D.C.1989), we said that the pertinent words of this statutory provision "appear unambiguous, and the legislative history indicates the clarity of the D.C. Council's intent." We went on to "hold that D.C.Code § 29-1141 allows a foreign cooperative to govern itself according to its bylaws and the laws of the state where it was incorporated. . . ." Id. at 154. The court addressed concerns of District residents who did not wish to be subjected to the law of another jurisdiction by stating that "cooperative members' rights are protected by the bylaws of the cooperative association and by the provisions of their occupancy agreements, each of which will be personally known to the member." Id. Accordingly, to the extent that we can determine it, Delaware law controls in resolving the issue concerning the imposition of a rental surcharge on an owner who leases her cooperative apartment.
The applicable Delaware statutory law appears to be the Delaware Unit Property Act (Del. C. § 25-2201 et seq.). Section 2209 of that law states:
Section 25-2202(2) defines "code of regulations" as "such governing regulations as are adopted pursuant to this chapter for the regulation and management of the property, including such amendments thereof as may be adopted from time to time." The term "code of regulations" appears to cover the bylaws of the cooperative.
(Citations omitted). Under the Broadmoor bylaws, actions taken by the Board must be "lawful" and "appropriate." Section 21 of the bylaws empowers the Board to "do all such lawful acts and things as are by statute, Certificate of Incorporation or these Bylaws directed or required to be exercised or done by the members." Section 47 authorizes the Board to make "appropriate rules and regulations controlling use of apartments...."
The meaning of the word "appropriate" as used in the bylaws may be determined by reference to § 8(7) of the contract, in which the Broadmoor agrees "generally, to do and perform all other acts reasonably required to insure the sound operation of the Co-operative and to protect the investment of its members." In the context of the contract and bylaws, "appropriate" means "reasonable." Hence, we review the surcharge imposed on rentals to determine whether it is reasonable. In that regard, we are bound by the record before us and the arguments preserved in the trial court.
Mrs. Kelley argues that the surcharge was not only unreasonable but also subjective and discriminatory. She suggests events that could result from the surcharge, including: non-competitive rental rates, forced sales, adverse tax consequences, and adverse impact on State Department and other government personnel who spend tours of duty overseas. The problem with Mrs. Kelley's position is that it is based on conjecture and speculation. She presented no affidavits to indicate that such events were probable. Nor did she present any affidavit or Board minutes to rebut the affidavit of Sandra McFeeley, Esq., President of the Board.
Ms. McFeeley's affidavit addressed the purpose of the surcharge and why it was necessary to "protect the investment of [the Broadmoor's] members." See § 8(7) of the contract. The surcharge is designed to promote owner occupancy. One of the ways to accomplish this objective "is to discourage the use of individual units as rental investment property." Moreover, new owner occupancy depends on the ability of prospective owners to secure proper financing. Ms. McFeeley's affidavit explained the difficulty of securing a Federal National Mortgage Association (Fannie Mae) mortgage if twenty to thirty percent of the apartments were rental units. It also stated that Broadmoor would not be eligible for Fannie Mae financing if more than thirty percent of the units were rented. To her affidavit was attached a copy of a Fannie Mae document containing some of its regulations. Finally, the affidavit explained that if less than fifty percent of the Broadmoor apartments are not "used as a primary residence, the Association loses all of the available homestead exception, and receives no credit whatsoever for not using municipal trash collection."
Mrs. Kelley suggests that "[o]lder people and handicapped people are most likely to suffer the adverse impact of the surcharge regulation." We have previously recognized that a regulation may be unreasonable if it has "an unfair or disproportionate impact on only certain unit owners." Johnson v. Hobson, 505 A.2d 1313, 1318 (D.C.1986). However, there is no evidence in the record to indicate that the surcharge has a disproportionate impact on older people or the handicapped, or is unfair to them.
Mrs. Kelley also maintains that the rental surcharge to which she is being subjected would be $400 in the first year and $2,000 by the fifth year, and that she would be subsidizing those who own and occupy their apartments. She has presented no affidavits substantiating these conclusory statements.
On the record before us we cannot say that a $5 or $25 monthly rental surcharge is unreasonable, subjective or discriminatory. Therefore, we affirm the trial court's orders of June 1 and June 30, 1995. As a matter of law, the Broadmoor was entitled to summary judgment on the issues presented.
For the foregoing reasons, we affirm the judgment of the trial court.
Affirmed.
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