WOLFF v. FOX

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Court of Appeal, Third District, California.

Larry WOLFF, Plaintiff and Appellant, v. Charles FOX et al., Defendants and Respondents.

Civ. 15955.

Decided: March 21, 1977

Thomas H. Frankel, Davis, for plaintiff and appellant. Jerome S. Stanley, James L. Stevens, Jr., Sacramento, for defendants and respondents.

Here we confront a statute, Civil Code section 789.3, which imposes a $100 per day civil penalty on a landlord of residential property who cuts off the tenant's utility services.1 In the superior court the landlord's suit for unlawful detainer and unpaid rent was consolidated with the tenant's suit for a statutory penalty of $16,300 flowing from the tenant's assertion that he had been deprived of utility services for 163 days. The tenant vacated the premises pending suit. The trial court gave the landlord judgment for $900 in unpaid rent and rejected the tenant's claim for the statutory penalty. The tenant appeals.

Wolff, the tenant, together with his wife and eight children, had been evicted from their residence for nonpayment of rent, then rented another house. Soon Wolff fell behind in rent. Defendants Fox and Keith bought the house in May 1973 and instructed the seller's agent to ask Wolff to vacate. Wolff phoned defendants, asking to remain in the house for a ‘short period’ while he secured other housing. Defendants relented and agreed to a month-to-month tenancy at a monthly rental of $200 including utilities. Wolff paid the June rent but not the July rent. Defendants served him with a three-day notice to pay rent or quit Wolff paid part of the July rent and defendants decided not to go forward with the eviction proceeding.

In August defendants received the first of a series of worthless checks from Wolff. Defendants filed a small claims action against Wolff for unpaid rent, assertedly because they were more interested in having the rent paid than in evicting Wolff and his large family. Water service to the house was turned off in September but promptly restored by Wolff himself, who simply turned the main valve on.

In November Wolff presented defendants with a worthless check for $500 in ‘payment’ of defendants' small claims judgment. Defendants then served him with a second notice to pay rent or quit. Wolff wrote defendants, asserting that he was not behind in rent and could prove it by reference to money orders. Defendants had received no money orders. On December 26 defendants commenced an unlawful detainer action.

On January 2, 1974, defendants ordered termination of municipal water and garbage services. On this occasion the main water valve was broken to prevent Wolff from turning it on. Utility services were not restored until Wolff moved from the house on March 31, owing $900 in back rent. During this period Wolff hauled his own garbage, hauled in some of his own water and secured other water from a hose connected to his neighbor's faucet.

According to defendants' testimony, they had paid the bills for water and garbage on the strength of Wolff's broken promises to pay rent while he was looking for another dwelling. They had the service terminated so that they would ‘no longer have to pay the bill.’ The trial court found on substantial evidence that Wolff could have obtained water and garbage services by opening an account in his own name with the municipal utility; that defendants had never denied Wolff permission to have the utilities put in his own name; that Wolff was aware of this alternative but did not pursue it.

The trial court's refusal to apply Civil Code section 789.3 represents the central issue on appeal. The court took the view that the November three-day notice to pay rent or quit had terminated the tenancy, hence that the statutory essential of a landlord-tenant relationship had ended before the utilities were turned off.

At this point several of the statute's verbal characteristics should be noted. Section 789.3 assumes existence of a landlord-tenant relationship at the time the prohibited act is committed. The prohibited act is the willful interruption or termination of utility services. It is an act performed with intent to terminate the tenant's occupancy. The statute awards a penalty of $100 for each day of deprivation.

We disagree with the trial court's view. Expiration of the three days specified in a notice to pay rent or quit does not terminate a tenancy; it is only a prelude to an unlawful detainer action; the tenant is entitled to peaceful possession until that action culminates in a judgment of forfeiture. (Grand Central Pub. Market v. Kojima, 11 Cal.App.2d 712, 717, 54 P.2d 786; 3 Witkin, Summary of California Law, Real Property, § 526, p. 2201.) Contrary to the trial court's view, the landlord-tenant relationship survived the three-day notice.

The $100 per day penalty is evoked only when the landlord acts willfully and with intent to terminate occupancy. The issues of willfulness and intent to terminate are pivotal in any lawsuit to recover the penalty. Here, there was no finding, one way or the other, on these issues. Absence of these material findings requires reversal. Further analysis of the statute is necessary to guide court and counsel on retrial.

Defendants charge that the statute deprives them of due process of law by forcing them to pay for the tenant's utilities with little or no expectation of recovery, hence that it takes their property by means of a legislative enactment. (See, e.g., Cooke v. Cooke, 65 Cal.App.2d 260, 269, 150 P.2d 514.) In a companion appeal, Hale v. Morgan, Cal.App., 137 P.2d 264, the landlord charges a denial of equal protection as well as lack of due process.

The constitutional attack entails separate examination of the statute's two prime features: first, the prohibition against the willful termination of utility seryices and the imposition of actual or compensatory damages for violation of that prohibition; second, the imposition of a $100 daily penalty as a sanction. The first of these features easily survives constitutional attack. In deciding whether an exercise of the police power deprives the subject of due process of law, the courts inquire only if the objective of the statute is one for which the power may legitimately be invoked and whether the statutory means reasonably support that objective. (Wilke & Holzheiser v. Dept. of Alcoholic Beverage Control, 65 Cal.2d 349, 359, 55 Cal.Rptr. 23, 420 P.2d 735.) Similar restraint characterizes the ‘basic and conventional’ standard for reviewing economic legislation by the measure of the equal protection guaranty. The statute's differential treatment of claims or persons is presumably constitutional; the equal protection guaranty demands only that the statute bear some rational relationship to a ‘conceivable legitimate’ state purpose. (D'Amico v. Board of Medical Examiners, 11 Cal.3d 1, 16–17, 112 Cal.Rptr. 786, 520 P.2d 10.)

The California Supreme Court recently conducted an in-depth analysis of evolving residential rental practices in industrial society and the accompanying transformation of the traditional rules of law pervading the landlord-tenant relationship. (Green v. Superior Court, 10 Cal.3d 616, 111 Cal.Rptr. 704, 517 P.2d 1168.) The court viewed modern renters as consumers of a package of services designed to assure habitability, among them essential utility services. (Id. at pp. 623, 627, 635, 111 Cal.Rptr. 704, 517 P.2d 1168.) It recognized the generally superior economic position of landlords, a recognition which merited discard of the caveat emptor approach which had burdened tenants in the past. (Id. at pp. 624–625, 111 Cal.Rptr. 704, 517 P.2d 1168.)

The legislature has exhibited a parallel recognition of landlord-tenant problems. Viewing the harsh, extrajudicial evictions of an earlier era, the legislature adopted Code of Civil Procedure section 1161, the unlawful detainer statute, designed to supply a summary, judicially administered procedure for evictions. The unlawful detainer statute seeks ‘to obviate the need for self-help by landlords and therefore to avoid breaches of the peace.’ (Kassan v. Stout, 9 Cal.3d 39, 44, 106 Cal.Rptr. 783, 785, 507 P.2d 87, 89.) In adopting section 789.3, the 1971 legislature embraced a policy of protecting renters against another kind of self-help which occurs when the landlord shuts off essential, life-supporting utility services. By prohibiting that kind of eviction tactic, section 789.3 evinces a purpose to confine residential landlords to court-administered eviction methods. In due process terms, the objective represents a legitimate policy choice and the award of compensatory damages a reasonable means of reinforcing the policy.2

In equal protection terms, the prohibition comes down more heavily on the landlord than the tenant. It demands that the unpaid landlord continue to pay his utility bills even for the benefit of a judgment-proof tenant. If the tenant is a poor credit risk, the landlord suffers equally with other entrepreneurs who do business with poor credit risks. At the outset of the tenancy, he may protect himself by having the tenant engage his own utility services. The statutory prohibition is a reasonable means of attaining a legislative policy, designed to maintain relative economic equilibrium between the parties. Although it protects one party and hurts another, it does not offend the equal protection concept.

Analyzed by equal protection standards (even the ‘basic and conventional’ standard of judicial restraint), the $100 per day penalty evokes a sharper response. The exaction is a penalty in the orthodox sense; it compels a defendant to pay a plaintiff other than actual or compensatory damages. (Miller v. Municipal Court, 22 Cal.2d 818, 837, 142 P.2d 297.) The legislature has power to impose civil penalties on those who disregard its police power; generally, these penalties are immune from due process attack. (Department of Social Welfare v. Gardiner, 94 Cal.App.2d 431, 433, 210 P.2d 855; Shalz v. Union Sch. Dist., 58 Cal.App.2d 599, 606, 137 P.2d 762; see 36 Am.Jur.2d, Forfeitures and Penalties, § 53, p. 644.) The equal protection analysis requires consideration of a statutory feature other than the penalty clause itself. It demands appraisal of the statutory element of willfulness.

As we have observed, the statute prohibits the willful termination of utility services. Usually, willfulness does not entail awareness of the prohibitory law or an intent to violate it; it implies only the deliberate commission of an act which the law forbids. (Lyons v. Superior Court, 43 Cal.2d 755, 759, 278 P.2d 681; In re Trombley, 31 Cal.2d 801, 807, 193 P.2d 734; People v. Mancha, 39 Cal.App.3d 703, 722, 114 Cal.Rptr. 392.)

Construed to apply to an owner who shuts off the utilities in ignorance of the statute, the $100 daily penalty would have a highly selective focus. No sane landlord, knowing the law, would risk the implacably accumulating penalty as a means of saving the paltry cost of utilities. The statute would hit only those who are ignorant of it; the aware would avoid it like a plague. So construed, the penalty provision would pose no more than a verbal threat to the landlord who knows of it; would entrap the landlord who acts in ignorance of the consequences; would assure uninterrupted utility services to the tenant whose landlord knows the law and supply a $100 daily bonanza to the tenant whose landlord does not. Section 789.3 seeks to assure uninterrupted utility service under threat of the civil penalty. A penalty imposed upon a violator to whom the threat had not been communicated would be no threat at all, but a startling blow from behind. The uncommunicated threat bears no rational relationship to the statute's objective of uninterrupted service.

So construed, the statute would represent an indulgence in stereotypes—the Simon Legree landlord and the Little Eva tenant. Real life often contradicts these stereotypes. The tenant may be a rascal and the landlord his hapless of temporary victim. Desperate to rid himself of the rascal and unconscious of the law's heavy-handed exaction, the landlord may turn off the utilities; if the tenant can survive the siege for 30, 60 or 90 days, he reaps a bonanza of $3,000, $6,000 or $9,000 at the landlord's expense.

The penalty is unaccompanied by any provision for mitigation. (See Jacobson, Legal Aspects of Wrongful Termination of Utility Service (1974) 8 Beverly Hills Bar J., No. 4 (Sept. 1974) 66, 69.) Even in this inflationary era, a tenant may choose compensation of $100 per day in preference to restoration of utilities. Applied to reward a tenant at the expense of a landlord who shuts off the service in ignorance of the law, the statutory penalty would form a constitutionally inacceptable discrimination. It would deny equal protection of the laws.3

A statute which is reasonably susceptible of two constructions should be interpreted to render it constitutional. (San Francisco Unified School Cist. v. Johnson, 3 Cal.3d 937, 942, 92 Cal.Rptr. 309, 479 P.2d 669.) General terms in statutes will not be construed to lead to injurious or oppressive results. (Citizens Utilities Co. v. Superior Court, 59 Cal.2d 805, 811, 31 Cal.Rptr. 316, 382 P.2d 356.) At this point, the question is whether, consistently with the statute's central objective, the word willfully may be interpreted to exclude conduct performed without knowledge of its prohibited character.

Morissette v. United States, 342 U.S. 246, 250–252, 72 S.Ct. 240, 96 L.Ed. 288, points out that malice, scienter, fraud, willfulness and intent are terms which courts use to signify guilty knowledge or mens rea. Law-making bodies utilize these terms in criminal and civil legislation with a variety of objectives, ranging from violations demanding guilty knowledge (e.g., Lambert v. California, supra; Morissette v. United States, supra) to ‘public welfare’ offenses which disregard intent. (See, e. g., United States v. Dotterweich, 320 U.S. 277, 280–281, 64 S.Ct. 134, 88 L.Ed. 48; Sandstrom v. California Horse Racing Bd., 31 Cal.2d 401, 406–407, 189 P.2d 17; Sayre, Public Welfare Offenses, 33 Col.L.Rev. 55; Perkins, The Civil Offense, 100 U. of Penn.L.Rev. 832; Mueller, On Common Law Mens Rea, 42 Minn.L.Rev. 1043.) Historically, a marked distinction existed between willfulness as an element of specified criminal intent and as a civil tort term. Decades of statutory and decisional permutations have blurred the distinction. (See, e. g., United States v. Bishop, 412 U.S. 346, 93 S.Ct. 2008, 36 L.Ed.2d 941; United States v. Illinois, Central R. R. Co., 303 U.S. 239, 242–243, 58 S.Ct. 533, 82 L.E.d. 773; United States v. Murdock, 290 U.S. 389, 394, 54 S.Ct. 223, 78 L.Ed. 381; Lyons v. Superior Court, supra, 43 Cal.2d at p. 759, 278 P.2d 681; Donnelly v. Southern Pacific Co., 18 Cal.2d 863, 869, 118 P.2d 465; Brogan, An Analysis of the Term ‘Willful’ in Federal Criminal Statutes, 51 Notre Dame Lawyer 786.)

Judicial definitions of willfulness as a noun and as a modifying term occupy about half a volume of Words and Phrases. The term is sometimes used in a psychological sense, to denote volition, sometimes in a moral sense, to signify bad purpose or evil motive. These variant verbal designs account for varying statutory interpretations. Be that as it may, a number of decisions construe willfulness to connote awareness of the act's prohibited character. United States v. Illinois Central R. Co., supra, 303 U.S. at page 243, 58 S.Ct. at page 535, quotes approvingly from a statement of then Circuit Judge Van Devanter in St. Louis & S. F. R. Co. v. United States (8th Cir.) 169 F. 69, 71, as follows: ‘So, giving effect to these considerations, we are persuaded that [willfully] means purposely or obstinately and is designed to describe the attitude of a [person], who, having a free will or choice, either intentionally disregards the statute or is plainly indifferent to its requirements.’

Similarly, in construing federal tax evasion statutes, the United States Supreme Court equates willfulness with ‘a voluntary, intentional violation of a known legal duty.’ (United States v. Bishop, supra, 412 U.S. at p. 360, 93 S.Ct. at p. 2016.) In other federal statutes, willfulness has been similarly construed to denote an act performed with knowledge that it violated a statutory prohibition. (United States v. Moylan (4th Cir.) 417 F.2d 1002, 1004; United States v. Rabb (3d Cir.) 394 F.2d 230, 232.)

In the context of the civil penalty for serious and willful misconduct in the workers' compensation law, the California Supreme Court has observed: ‘It has frequently been said that wilful misconduct involves the knowledge of the person that the thing which he is doing is wrong. [Citations.]’ (Hatheway v. Industrial Acc. Comm., 13 Cal.2d 377, 380, 90 P.2d 68, 70; see also, Dowden v. Industrial Acc. Comm., 223 Cal.App.2d 124, 129, 35 Cal.Rptr. 541.)

The cited decisions illustrate our point—that law-making bodies often employ the terminology of willfulness to denote an act or omission committed in awareness of its prohibited character. That interpretation is fully consistent with the objective of section 789.3. It does not relieve the landlord of the threat of the civil penalty but poses the threat when he knows of it. It excludes the ‘sandbag’ element from the statute. It requires evidence of the landlord's awareness of the statutory penalty as an element of willfulness.

Should the landlord turn off the utilities in ignorance of the penalty, he may nevertheless become vulnerable to it. Section 789.3 declares that he shall not ‘cause, directly or indirectly, the interruption or termination of any utility service . . ..’ An interruption in utility service is a continuing condition. At any time during the interruption the tenant or a third person may inform the landlord of the statutory prohibition and the civil penalty. Should he then fail to restore the service, the interruption would become willful and he would be liable for each ensuing day of deprivation. Construed to require awareness of the law as an element of willfulness, the statute survives constitutional attack.

Judgment reversed.

FOOTNOTES

1.  Civil Code section 789.3 provides: ‘(a) A landlord shall not with intent to terminate the occupancy under any lease or other tenancy or estate at will, however created, of property used by a tenant as his residence willfully cause, directly or indirectly, the interruption or termination of any utility service furnished the tenant, including, but not limited to, water, heat, light, electricity, gas, telephone, elevator, or refrigeration, whether or not the utility service is under the control of the landlord.‘(b) Any landlord who violates this section shall be liable to the tenant in a civil action for all the following:‘(1) Actual damages of the tenant.‘(2) One hundred dollars ($100) for each day or part thereof the tenant is deprived of utility service.‘(3) In any action under subdivision (b), the court shall award reasonable attorney's fees to the prevailing party.’

2.  A suit for compensatory damages under section 789.3 bears strong resemblances to a constructive eviction action or to a suit for breach of a warranty of habitability. (See Green v. Superior Court, supra, 10 Cal.3d at pp. 628–629, 111 Cal.Rptr. 704, 517 P.2d 1168.)

3.  Construed to impose a cumulative civil penalty upon an owner who shuts off the utilities in ignorance of the penalty, the statute is conceivably vulnerable to due process attack. The maxim ‘ignorance of the law will not excuse’ is deeply grounded in Anglo-American jurisprudence. It rests upon the practical social expedient of preventing persons accused of crime from defending themselves by asserting ignorance of the law. (People v. O'Brien, 96 Cal. 171, 176, 31 P. 45; 1 Witkin, California Crimes, § 148, pp. 141–142.) Thus, in the interpretation of criminal statutes, willfulness usually denotes volition only, a purpose to commit the act, regardless of ignorance of the law or intent to violate it. (Pen.Code, § 7, subd. 1.) Here, in contrast, the statute imposes a civil penalty for an act which is not inherently wrongful but rather of the mala prohibita variety. The constitutional grant of due process places an outer limit on the police power. ‘Engrained in our concept of due process is the requirement of notice. Notice is sometimes essential so that the citizen has the chance to defend charges. Notice is required before property interests are disturbed, before assessments are made, before penalties are assessed.’ (Lambert v. California, 355 U.S. 225, 228, 78 S.Ct. 240, 243, 2 L.Ed.2d 228.) Here notice, that is, advance awareness of the statute's cumulative civil penalty, is an indispensable ingredient of fairness. Lack of awareness deprives the potential violator of a knowing choice between action and inaction. To award arbitrarily fixed, cumulative damages to one person at the cost of another who lacked awareness that he was violating the law displays an elemental unfairness which may offend the due process concept. We rest our view of the statute on the equal protection ground, however.

FRIEDMAN, Acting Presiding Justice.

JANES and EVANS, JJ., concur.