District of Columbia
In RFB Prop., LLC, v. Federal National Mortgage Association, 19-CV-527 (October 27, 2022), the appellant argued that the trial court erred when it determined that it lacked standing because its corporate status had lapsed at the time it filed its complaint to quiet title.
The District of Columbia Court of Appeals analyzed the language of D.C. Code § 29-106.03(d). The statute sets out that, subject to an exception that was inapplicable to this case, when reinstatement under this section is effective, it shall relate back to and be effective as of the effective date of the administrative dissolution, and the entity shall resume carrying on its activities and affairs as if the dissolution had never occurred.
The Court explained that the use of the word “shall” denoted that those were mandatory provisions. Thus, the Court concluded that it was required to recognize the appellant’s active corporate status retroactive to the date of its administrative dissolution.
The Court noted that federal and state courts have construed similar statutory language to hold that reinstatement must relate back to the date of the dissolution and therefore, ratifies contracts entered into during the interim period of dissolution. Accordingly, the Court found that section 29-106.03(d) specifies that any corporate act taken during the period of the interim dissolution is deemed ratified upon the corporation’s reinstatement. In this case, the relation back and ratification validated the plaintiff’s complaint and recordation of its deed. Therefore, the plaintiff had standing to maintain and proceed with its quiet title action after its corporate status was reinstated.
The Court reversed the trial court’s grant of dismissal and remanded the case.