McDaniel v. 162 Columbia Heights Housing Corporations

162 Columbia Heights Housing Corporations (162 CHHC) (defendant) was a multiunit residential cooperative corporation that owned a building with a garden unit inside. Celeste Gudas purchased the garden unit from 162 CHHC. Gudas later sued 162 CHHC because 162 CHHC had refused to approve her renovation plans for the garden unit. 162 CHHC settled the lawsuit by agreeing to pay Gudas $550,000 in exchange for her relinquishment of all rights to the garden unit. K.C. McDaniel (plaintiff) advanced the $550,000 to 162 CHHC for the settlement payment. McDaniel allegedly had advanced an additional $251,000 to 162 CHHC to pay for its attorney’s fees and other fees regarding the garden unit. McDaniel contended that she had made these advances in exchange for a proprietary lease and the shares allocated to the garden unit. However, the parties never documented such an agreement in an authenticated agreement, and, per the settlement terms, 162 CHHC became the owner of the garden-unit shares. Thereafter, Keiko DeLille, a director and shareholder of 162 CHHC, purportedly demanded an additional $100,000 from McDaniel. McDaniel allegedly refused and demanded repayment of the prior advances to no avail. DeLille subsequently listed the garden unit for sale, which prompted McDaniel to file a financing statement naming 162 CHHC as the debtor and claiming to be a secured creditor with an interest in the garden unit and any proceeds of its lease or sale. 162 CHHC sold the garden unit to a third party for $850,000 and paid $650,000 to McDaniel. McDaniel eventually sued 162 CHHC and DeLille. During the proceedings, 162 CHHC and DeLille moved for an order directing McDaniel to terminate the financing statement and to pay statutory damages of $500 pursuant to Uniform Commercial Code (UCC) § 9-625. McDaniel argued that the financing statement was irrelevant because she held a common-law lien but that the financing statement nevertheless served to put third parties on notice of her interest.