Law Office Lease Not Invalid

The District of Columbia Court of Appeals rejected a claim by Constantine Cannon LLP that its lease for office space was invalid

Appellee Mullen Management Company, Inc., is a Delaware corporation that owns and leases an office building near McPherson Square in the city’s northwest quadrant. Mullen obtained a certificate of authority to transact business in D.C. on December 30, 1996. Appellant Constantine Cannon LLP is a Delaware limited liability partnership whose attorneys practice law in the District. In early 2007, Cannon approached Mullen to inquire about leasing office space in Mullen’s building. The parties signed a lease on November 30, 2007, and Cannon began to make improvements to the property as required by the lease. A dispute arose shortly thereafter regarding the building’s air ventilation system, and Cannon directed its general contractor to stop work in February 2008. Cannon refused to pay its contractor, who then recorded a mechanic’s lien on the property for nearly two million dollars.

Cannon then learned that Mullen’s certificate of authority had been revoked on September 10, 2007, eleven weeks before the lease was signed, after the D.C. Department of Consumer and Regulatory Affairs determined that Mullen “failed and/or refused to file reports and pay all fees due and owing.” Cannon sent Mullen a letter on March 6, 2008, contending that the lease was void for that reason.

Associate Judge Beckwith for the division

While we have held that doing business without the appropriate license voids contracts in some circumstances, we have done so only when the licensing scheme is a “prohibitory regulation enacted to protect the public,” especially those aimed at preventing “fraudulent and unscrupulous practices.”

Holding

we affirm the trial court’s judgment that the Cannon-Mullen lease was enforceable notwithstanding that it was signed after Mullen’s certificate of authority to do business in the District was revoked for failure to pay fees and file reports.

(Mike Frisch)