KNIGHT v. HALLSTHAMMAR

Reset A A Font size: Print

Court of Appeal, Second District, Division 1, California.

James E. KNIGHT et al., Plaintiffs and Respondents, v. Maria HALLSTHAMMAR, Defendant and Appellant.

James E. KNIGHT et al., Plaintiffs and Respondents, v. Cecelia DeCAPRIO, Defendant and Appellant.

James E. KNIGHT et al., Plaintiffs and Respondents, v. Clara BREIT, Defendant and Appellant.

Civ. 56877.

Decided: December 21, 1979

Ronald L. Rouda, Los Angeles, for defendants and appellants. Robert E. Canny, Los Angeles, for plaintiffs and respondents.

INTRODUCTION

Three unlawful detainer judgments were rendered in the municipal court on the captioned consolidated cases in favor of the plaintiffs (hereinafter collectively referred to as plaintiffs and/or Landlords) and against the defendants (hereinafter collectively referred to as defendants and/or Tenants) following a jury trial. Defendant Tenants appealed to the Appellate Department of the Los Angeles Superior Court which reversed the judgments on the ground that the trial judge's instructions, particularly those involving the defense of breach of the implied covenant of habitability, constituted reversible error. We ordered the matter transferred to this court pursuant to rule 62(b) of the California Rules of Court.

THE FACTS

The facts were presented in the record on appeal in a “joint settled statement” containing “synopsis of the fifteen trial days of exhaustive testimony” in lieu of a reporter's transcript.1 Following is a brief summary of the salient testimony contained in the joint settled statement relevant to this appeal:

On May 18, 1977, plaintiff Landlords became owners of an existing 30-unit apartment building located at 1305 Ocean Front Walk in Venice, California. The prior owners from whom plaintiffs herein purchased the property were Norman Baker and his parents, Joseph and Mildred Baker (the Bakers), who had hired Andrew Allen (age 93) as their manager during the 4 years they owned the apartment building. Mr. Allen had managed the building for some 30 years for the Bakers and other owners.

On May 19, 1977, Western Investment Properties Inc. (hereinafter W.I.P.), which had been hired by the plaintiff Landlords to manage the property and whose duties included the collection of rents and responding to maintenance requested by the Tenants, had served upon the tenants a letter of rent increase.2

On May 26, 1977, defendant Tenant Clara Breit, as representative of the “1305 Ocean Front Walk Tenants Association” of which all tenants were members, sent a letter to W.I.P. stating that because of certain conditions in the apartment building and the new rent increases the Tenants would withhold all future rent payments. Neither W.I.P. nor plaintiffs herein responded to this letter.

In response to the rent withholdings, Landlords had Mr. Allen (who had been retained as an employee by plaintiffs herein and whose duties were to clean the hallway and stairway) serve on the Tenants three-day notices to pay rent or quit. Thereafter unlawful detainer actions were filed by the Landlords against the Tenants. The cases were consolidated for trial along with four others involving other tenant-defendants of the same building.3

The Tenant's defense at the trial of the unlawful detainer actions was primarily based upon plaintiff Landlords' alleged breach of implied warrant of habitability. The testimony of defendant Tenants Maria Hallsthammar and Clara Breit (Tenant Cecelia DeCaprio, who according to plaintiffs' brief was present during the entire trial, did not testify), that of the other defendant tenants in the four other consolidated cases, namely Robert Martin, James McClure, Brian Norton and Joyce Blumenthal, and other witnesses called by defendants can be capsulized generally as referring to such complaints as dirty and unsanitary conditions in the hallways and lobby and of wall cracks, peeling paint, water leaks, heating problems, electrical fixture problems, broken or inoperable windows, rodents and cockroaches and inadequate heat in their apartments. Tenant Norton testified that he was only supplied a mouse trap to catch mice by Mr. Allen and complained that the apartment was often noisy at all hours of the day and night due to the bongo drum players and opera singers who congregated in the area just north of the building on Ocean Front Walk. The evidence was clear that all of the conditions complained of above existed prior to the plaintiffs herein acquiring ownership of the apartment building, but that the Tenants had complained to Mr. Allen about the problems prior to and subsequent to plaintiffs acquiring ownership of the property and only a portion of their complaints had been corrected.

Witness Lawrence Young, a health officer for the Los Angeles County Health Department, testified that he inspected the premises in question on June 2, 1977, and four times thereafter ending on August 5, 1977, and on June 2, 1977, noted seven violations which he ordered the plaintiffs to abate, all of which were abated on August 5, 1977. He testified that the violations were minor in nature and that the conditions he saw did not render the building uninhabitable under the Health Department standards; that the uninhabitable standard was one in which the building or a portion thereof was totally unfit for human habitation, that is no fresh water supply, not hot or cold water, extensive sewage leakage or structurally unsound conditions; and that this definition of uninhabitability was a standard developed to determine whether a building was condemnable.

Witness Norman Baker, the previous owner of the apartment building, testified that there had been problems with the heating system in the building shortly after he acquired ownership and he installed a new boiler; that problems in tenant Norton's apartment, including cracking and falling paint and a leaky and falling ceiling, had not been repaired by the time he sold the property to plaintiff Landlords; that the conditions in Mr. Norton's apartment existed for over six months, but that he and Mr. Norton could not get together on a time for the repairs to be made and on several occasions Mr. Norton turned workers away because of illness; that no apartment was without a heater when rented, except that it was possible that defendant Breit's apartment was rented without a heater; and that the steam heating system was centrally controlled and Mr. Allen turned the boiler on and off, but he believed the heating facilities were kept on 24 hours a day during winter time. He testified that the rents in the building were below market value.

Plaintiff Landlord James E. Knight testified that around March 1977 his partner Rodger Spero approached him about the possibility of purchasing the property located at 1305 Ocean Front Walk; that he first inspected some of the units during escrow in April 1977 and made a detailed itemization of improvements that needed to be done to the apartments on August 19, 1977; that he and Mr. Spero made plans for major renovation of the common areas and exterior and in June 1977 W.I.P. coordinated bids for renovation of the common areas; that the improvements he made since taking ownership included painting the front entrance, installing new carpeting in the elevator, the hallways and landings, repairing some of the hallway walks, and having professional painters paint some of the hallway french doors and windows. Mr. Knight further testified that in the first part of June he hired the 4-Seasons Pest Control Co. to take care of pests and made arrangements for them to spray the apartments and retained them on a monthly service basis thereafter; that he did not know where the elevator shaft was when he bought the building but that when he got a complaint about the conditions in the shaft, he took care of it and hired an elevator maintenance service to make monthly checks on the elevator; and that he refurbished the vacant apartments, which included repainting, new carpeting in the living areas and new vinyl on the kitchen and bathroom floors, and in about five of the apartments he enclosed the bathtub with a natural cedar enclosure and converted the bathtub into a shower-tub combination.

Plaintiff Knight further testified that he was frustrated by tenants in his attempts to make repairs on the apartments; that he heard some complaints about the heating in August but did not remember specifically the date; that Tenant Breit complained about not having a heater and he had Mr. Allen install a steam radiator in the radiator outlet in her apartment on September 13, 1977; that the central heating was not turned on during the summer; that the bottom of the back stairway was detached at one side of the bottom in that part of the cement was broken away and he added a temporary support which was removed by unknown persons on numerous occasions and he finally cemented the missing portion in September; that he fixed a long crack in the wall in Joyce Blumenthal's apartment; that although tenant Blumenthal complained about window problems and in particular the front window which did not stay closed, when he tried it, it worked although the window had a broken sash rope; and that there was a heater in the living room but none in the bedroom, that the Department of Building and Safety in September told him to cap off the radiator outlet pipe so that it would not make noise when the central heating system was operating and he complied.

Plaintiff Knight further testified that he had not received any rent payments from any of the tenants, that the Bakers from whom he purchased the apartment building were giving him a grace period on his payments due under the trust deed, and that he has paid the utilities and a public phone since May 1977. He testified that the reasonable value of the premises was that which was stated in the 30-day notices of rent increase served on the tenants on May 19, 1977.

Witness Jillian Reusch, employed by W.I.P. as a property manager, testified that she received the letter dated May 26, 1977, from the “Ocean Front Walk Tenants Association,” but that she never responded to the letter; that defendant DeCaprio made a telephone complaint to her in the beginning of June regarding broken windows and plumbing problems; that she had one broken window in the apartment repaired and that the work order was returned; that except for the above she did not personally receive any complaints about the building from the defendant Tenants; that an inspection report compiled by plaintiff Landlords, which described work that needed to be done in most of the apartments in the building, was prepared between April and the time the building was acquired; and that in mid-June 1977 W.I.P. began preparation of a proposal for the renovation of the hallways of the building and accepted bids from electrical companies to install drop ceilings and fluorescent lights, bids from painters and bids for recarpeting the hallways.

The evidence was uncontradicted that none of the defendant Tenants except for Ms. DeCaprio and except for the May 26, 1977, letter complained directly to W.I.P. or plaintiffs Knight and Spero Prior to the service of the three-day notice to pay rent or quit, but that all of the defendants personally complained to Mr. Allen about the conditions in their apartments prior to service of the three-day notices and prior to plaintiffs' ownership of the building and some complaints had been lodged with Norman Baker, the previous owner of the building.

ISSUES

The joint settled statement recites that it was limited “to the issues concerning certain refused jury instructions and the allowable number of peremptory challenges for alternate jurors, to be raised on appeal.”

Defendant Tenants' brief on appeal apparently abandons the issue on the allowable number of peremptory challenges for alternate jurors and focuses on jury instructions given and refused. Specifically defendant Tenants contend that the trial court erred in instructing the jury in the following particulars: (1) That the trial court erred in refusing defendant Tenants' proffered instruction that for the purposes of defense the plaintiff Landlords stood in the shoes of the previous owners; (2) that the trial court erred by instructing the jury that the defendant Tenants could waive the warranty of habitability; (3) that a landlord's habitability obligations could be excused by defendant's withholding rent monies; and (4) that the trial court did not properly define standards as to what constitutes a breach of the warranty of habitability and refusing their proffered instruction concerning conditions which relate to the implied warranty of habitability.

DISCUSSION

I

Defendant Tenants' first contention that for purposes of defense plaintiff Landlords in this unlawful detainer action were in the same position as the previous owners (the Bakers) is without merit.

The defendant Tenants requested that the following jury instruction be given which was refused by the trial court: “In the present case, the plaintiffs are the assignees of leases entered into between the former owners and defendants. The effect of the assignment is to transfer the interest of the former owners in the leased property to plaintiffs. The plaintiffs stand in the shoes of the former owners, taking their rights and remedies, subject to any defenses which the defendants had prior to the notice of the assignment. The plaintiffs can gain no better position than the former owners had with respect to the subject matter of the assignment.”

“No one, merely by reason of having acquired an estate subject to a covenant running with the land, is liable for a breach of the covenant before he acquired the estate, or after he has parted with it or ceased to enjoy its benefits.” (Civ.Code, s 1466.)

In Farber v. Greenberg (1929) 98 Cal.App. 675, 277 P. 534, the court held that a lessors' (here the Bakers) grantee (plaintiffs herein) was not liable for breach of covenant to make repairs where the breach occurred Before grantee (plaintiffs herein) acquired interest in the premises.

Standard Livestock Co. v. Pentz (1928) 204 Cal. 618, 269 P. 645, states that “accrued remedies for already ripened breaches . . . do not . . . pass . . ..” (Id., at p. 629, 269 P. at p. 649.)

In view of the above and under the circumstances present here, we conclude that the trial court did not err in refusing defendants' requested instruction and by instructing the jury in accordance with Civil Code section 823 since the exceptions set forth in Civil Code section 8234 apply.

Here, the evidence is overwhelming that the conditions complained of by all of the defendant Tenants arose Prior to the time the plaintiffs herein acquired ownership of the apartment building on May 18, 1977. Thus, the rights and obligations as between plaintiff Landlords and defendant Tenants under the lease agreements and applicable law were as of May 18, 1977. The Prior owners (the Bakers) are not a party to these consolidated actions.

The written lease agreements entered into between the prior owners (the Bakers) and defendant Tenants herein provided “for a tenancy from month-to-month” and contain the provision: “6. Any failure by Lessee to pay rent or other charges promptly when due, or to comply with any other term or condition hereof, shall at the option of the Lessor forthwith terminate this tenancy.” The lease agreements do not contain an express warranty of habitability which would bind the present plaintiff Landlords; thus, any rights pertaining to habitability must be either implied in law or created by statute.

II

Defendant Tenants' second contention that the trial court's instructions on the defense of breach of the implied warranty of habitability were in error is also without merit.

The trial court on the implied warranty of habitability instructed the jury as follows:

“In order to establish a defense to an action for unlawful detainer based on the defense of breach of the warranty of habitability, the tenant must establish the following elements:

“1. The existence of a material defective condition affecting habitability including common areas.

“2. The defective condition was unknown to the tenant at the time of the occupancy of his or her apartment.

“3. The effect on habitability of the defective condition was not apparent to the tenant upon a reasonable inspection.

“4. Notice was given the landlord within a reasonable time after the tenant discovered or should have discovered the breach of warranty.

“5. The landlord was given a reasonable time to correct the defect while the tenant remained in possession.”

Having concluded that plaintiffs herein do not, as it were, “step into the shoes” of their grantors (the Bakers), we hold under the circumstances of the case at bench the foregoing instruction was correct and in accordance with Quevedo v. Braga (1977) 72 Cal.App.3d Supp. 1, 140 Cal.Rptr. 143.

In Quevedo plaintiff-tenant occupied an apartment owned by defendant-landlord for a period of time during which he complained of certain alleged uninhabitable conditions and after vacating the premises sued the landlord seeking retroactive rent abatement based on the ground of an implied warranty of habitability. The reviewing court held that such a cause of action would lie even though the premises had been vacated and declared that the elements of such a cause of action are those as listed above in the court's instruction in the case at bench.

Here, the tenants are not plaintiffs in an action seeking retroactive rent abatement based on their landlords' alleged breach of the implied warranty of habitability after vacating the premises as in Quevedo. They remained in possession and refused to pay any rent whatsoever and seek to defend against an unlawful detainer action by the new landlords, plaintiffs herein, even though their lease agreements specifically provided that “Any failure by Lessee to pay rent or other charges promptly when due, or to comply with any other term or condition hereof, shall at the option of the Lessor forthwith terminate this tenancy.” A three-day notice had been served, and the complaints by the landlords herein seek past rents owing. Since basically there is no difference for pleading or evidentiary purposes between an affirmative action (i. e., as a tenant complaint in Quevedo ) and an affirmative defense which “must be pleaded in the same manner as if the facts were set forth in a complaint,” Quevedo controls.

The defendant Tenants in their “second affirmative defense” do allege a list of certain defective and uninhabitable conditions and that plaintiffs failed to correct those conditions, thus breaching their implied warranty of habitability to defendants and therefore defendants owe plaintiffs substantially less than the rental agreement rate. The previous owners (the Bakers) are not a party to this action and defendant Tenants have failed to plead or prove that the defective condition(s) were unknown to them as of May 18, 1977, when the new owners (plaintiffs herein) acquired the apartment building. To the contrary, the evidence is overwhelming that the complained of conditions which allegedly rendered the premises uninhabitable were known to defendants and existed prior to plaintiffs herein taking title to the apartment building.

We are aware that it is “the (general) policy of this state to promote the sound growth and development of urban areas . . . through the correction of substandard, insanitary, blighted, deteriorating conditions . . . .” (Health & Saf. Code, s 33251.) However, this policy is set forth in California's “Community Redevelopment Law” under article 4 entitled “New Community Development.”

The case at bench does not involve “New Community Development”. The apartment building in question is of somewhat ancient vintage and has had several owners and changing tenants.

The facts of economic life rooted in our society include the concepts of private ownership of real property and a free market place and that real property owners who lease their properties are not usually engaged in an eleemosynary enterprise but are entitled to a fair return on their investment. However, the people of the State of California, aware that not all landlords are “good guys” and not all tenants are “bad guys” or vice versa and cognizant of the frailties of human nature, realized that fair and equitable rules should be set out in respect to landlords and tenants to insure that one does not take unfair or unconscionable advantage of the other. Thus, the citizens of California speaking through their elected legislators in Sacramento in 1970 enacted new Civil Code sections 1941.1 and 1941.2 and amended section 1942 which specifically spells out the duties and obligations of landlords and tenants, each to the other, and the remedies available in the event of a breach of those duties and obligations.

The state Legislature in the chapter entitled “Hiring Real Property,” sets forth in Civil Code sections 1941 through 1950 specific rules applicable to the instant case.

Section 1941 of the Civil Code provides that “The lessor of a building intended for the occupation of human beings must, in the absence of an agreement to the contrary, put it into a condition fit for such occupation, and repair all subsequent dilapidations thereof, which render it untenantable, except such as are mentioned in section nineteen hundred and twenty-nine.”

Section 1941.1 of the Civil Code enacted in 1970 (the same year as the “New Community Development” law was enacted) lists some 8 affirmative characteristics of a (tenantable) dwelling and declares that if any of the items listed substantially lacks any of such characteristics that the dwelling shall be deemed untenantable.

Section 1941.2 of the Civil Code also enacted in 1970 (the same year as the “New Community Development” law was enacted) lists some 5 affirmative obligations of the lessee and provides, in substance, that no duty on the part of the lessor shall arise under sections 1941 and 1942 if the lessee is in substantial violation of the lessee's affirmative obligations as listed.

Section 1942 of the Civil Code, as amended in 1970 (again, the same year the “New Community Development” law was enacted) is of particular importance in the case at bench. Section 1942 provides: “(a) If within a reasonable time after notice to the lessor, of dilapidations which he ought to repair, he neglects to do so, the lessee may repair the same himself, where the cost of such repairs does not require an expenditure greater than one month's rent of the premises, and deduct the expenses of such repairs from the rent, or the lessee may vacate the premises, in which case he shall be discharged from further payment of rent, or performance of other conditions. This remedy shall not be available to the lessee more than once in any 12-month period. (P) (b) For the purposes of this section, if a lessee acts to repair and deduct after the 30th day following notice, he is presumed to have acted after a reasonable time. The presumption established by this subdivision is a presumption affecting the burden of producing evidence.”

In the instant case defendant Tenants did not elect to repair the alleged dilapidations within their apartments within the amount of one month's rent Nor did they vacate the premises. Instead they remained in possession and refused to pay any rent whatsoever. If a tenant in an unlawful detainer action brought by the landlord could not waive the landlord's implied warranty of habitability Under the facts of the case at bench, the statutory scheme set forth in Civil Code sections 1941 et seq. described above, which reflects the will of the people, could be completely frustrated.

We are also aware of the cases of Hinson v. Delis (1972) 26 Cal.App.3d 62, 102 Cal.Rptr. 661, and Green v. Superior Court (1974) 10 Cal.3d 616, 111 Cal.Rptr. 704, 517 P.2d 1168. However, neither the Hinson nor the Green case resolved the issue of whether the defense of the landlord's breach could be waived.

In our view Quevedo (which acknowledged the existence of both Hinson and Green ) controls since it is compatible with and supportive of the statutory scheme for apportioning landlord-tenant obligations and duties and a means for resolving such disputes As present in the instant case.

To hold otherwise would create a situation in which much mischief could be unfairly imposed on some landlords whose sole source of income is derived from a few rental units. If, for example, a would-be tenant looking for a free ride inspected an apartment and was fully aware of its then condition, moved in and then refused to pay any rent whatsoever and also refused to vacate claiming the apartment was “uninhabitable,” the landlord would then be placed in an unfair position unless Quevedo applies.

The instant case is another example where failure to apply Quevedo would place a landlord who has just acquired ownership of rental properties at an unfair disadvantage in respect to tenants already in possession of a leased apartment. Elimination of the doctrine of waiver to the circumstances of the case at bench would be counter-productive to the public policy of improving the condition of rental properties. Here, plaintiff Landlords, apparently unlike the landlord in Green, just purchased the property and in anticipation of renovating the premises increased the rent. By denying the Landlords an instruction patterned after Quevedo under such circumstances would place the new owners of an apartment building in a Catch-22 position where they are denied the rental monies needed to correct the very conditions of which the tenant complains when the tenant refuses to pay any rent and stays in possession. New landlords should have a reasonable time to correct the defective conditions. It should also be noted that in the instant case, unlike in Green, the plaintiff Landlords Did attempt to contest the presence of serious defects in the leased premises. Moreover, in Green it was noted that substantial compliance with building and housing code standards materially affecting health and safety will suffice to meet the landlord's obligation. Here, witness Lawrence Young, a health officer for the Los Angeles County Health Department, had inspected the property and found seven violations, minor in nature, which were abated. He testified that the conditions he saw did not render the building uninhabitable under the Health Department standards.

III

Defendant Tenants' assertion that the trial court erred in instructing that a landlord's habitability obligations could be excused by defendant's withholding rent monies is not supported by the record.

The instruction in question required two specific conditions before the jury would be able to find for the defendant Tenants: first, the building must be uninhabitable; secondly, the owners must be given a reasonable opportunity to make necessary repairs; and if the jury found only one of the said conditions to be true, then they “may” find for the plaintiffs. The instruction used the term “may,” not “must.” Thus, the jury could have found that the premises were uninhabitable and that the owners were not given a reasonable time to make necessary repairs, and still found against plaintiff Landlords and in favor of defendant Tenants. The instruction does not require that the tenants must perform first by paying rent. Therefore, the jury instruction was more favorable to defendant Tenants in that in essence it instructed that if the premises are proven to be uninhabitable and the owner is given a reasonable time to make repairs, then the tenants would have a right to withhold rent.

Here, the evidence would amply support a jury's finding that the premises were not proven to be uninhabitable and/or the new owners were not given a reasonable time to make repairs. Once again, the prior owners (the Bakers) are not a party to this action.

IV

Defendant Tenants' final argument that the trial court erred in failing to properly instruct on the meaning of “habitability” is also without merit.

Defendants at trial requested an instruction to the effect that “a landlord has breached the implied covenant of habitability if the landlord has failed to substantially comply with any one or more of” 12 listed alleged requirements of “state or local law,” including such things as supplying “ garbage receptacles with close fitting covers.” The trial judge's refusal to give this instruction was correct. The Supreme Court in Green did not establish a checklist of defects or of requirements establishing habitability to be applied in every factual setting. The court stated the implied warranty of habitability “. . . does not require that a landlord insure that leased premises are in perfect, aesthetically pleasing condition, but it does mean that ‘bare living requirements' must be maintained.” (Green v. Superior Court, supra, 10 Cal.3d 616, 637, 111 Cal.Rptr. 704, 718, 517 P.2d 1168, 1182.) Instructions to that effect were properly given below.

Defendants protest the court's refusal to give their requested instruction that “under appropriate circumstances, lack of painting, water leaks and wall cracks may be of sufficient magnitude to relate to bare living requirements.” Once again, refusing this instruction was not error, as the court instructed the jury on the differences between bare living requirements and amenities generally.

V

The record in the instant case reflects, as stated in the joint settled statement, that “The trial was the consequence of a hotly disputed mid-summer rent strike and much of the testimony concerned the separation of opinions, biases and personal reference and establishing the general credibility of parties and witnesses . . . .”

There was apparently much acrimony on both sides. Since the condition of the premises about which defendant Tenants complained existed Prior to the plaintiff Landlords' acquisition of the property, the raise in rent may well have been the dominate factor for the rent strike rather than the alleged condition of the property. The acrimony is evidenced by defendant Tenants' leaflet entitled “Viper of Greed” and a sign on apartment doors “Don't rent here.” Defendant Tenants in their third affirmative defense postulate that plaintiff Landlords only purchased the property on speculation and for a tax break. According to plaintiff Landlords' brief on appeal there was evidence of “extensive vandalism” which occurred on the premises during the rent strike.

The new owners, plaintiffs herein, not only retained Mr. Allen as an employee but also immediately hired W.I.P. as property managers and plans were made to renovate the lobby and hallways and the unoccupied apartments were completely renovated; the seven violations found by the Los Angeles County Health Department on June 2, 1977, were all abated by August 5, 1977; the plaintiff Landlords hired a pest control company and an elevator maintenance company to service the building. When the defendant Tenants all refused to pay the rent, the plaintiff Landlords could not meet their mortgage payments and had to make special arrangements with the prior owners for deferred payments.

The issue on habitability was hotly contested. There was ample evidence for the jury to conclude that either the new landlords, plaintiffs herein, did not have a reasonable time to repair the conditions complained of by defendant Tenants who were already occupying their apartments at the time of the change in ownership or that although the conditions complained of by the defendant Tenants herein may not have rendered the apartments “aesthetically pleasing,” the apartments did meet “ ‘bare living requirements' ” which is all that is required under Green to defeat a claim of implied warranty of habitability.

We conclude the instructions considered in their entirety were fair and clear and were proper in all respects. Defendant Tenants were afforded their full day in court and a fair trial. The fact that the jury unanimously found against the three defendant Tenants herein but were unable to arrive at a verdict as to the four other consolidated cases involving other tenants shows that the jury carefully weighed the evidence and the applicable law as to each of the seven consolidated cases.

DISPOSITION

The judgments, and each of them, are affirmed.

Respectfully, I dissent.

I believe that the Appellate Department of the Los Angeles Superior Court was correct, and that the judgment of the Municipal Court in these cases should be reversed.

Appellants (the tenants) contend that the trial court's instructions on the defense of breach of the implied warranty of habitability were in error. The instructions placed the burden on the defense to show that the tenant did not know of the lack of habitability, that it was not apparent on reasonable inspection, that the tenant give notice of the defect and that the landlord was given time to repair.1

Under the earlier common law, a lease was viewed as a real estate conveyance in which the landlord had no duty to repair or place a dwelling in a habitable condition. This common law view of the lease has been gradually replaced by contract concepts. In the area of the landlord's duties, California statutes impose certain specific duties on landlords of dwellings,2 and afforded tenants some limited redress. Under Civil Code section 1941, a landlord is required to place the leased premises in a condition fit for occupancy, and to continually keep the same in repair. Section 1941.1 defines a dwelling as untenantable if it contains any of a range of listed defects. However, the landlord's duties under section 1941 do not arise if the tenant violates certain obligations referring to the proper use and maintenance of the dwelling (Civ.Code, s 1941.2). The tenant's only remedy under these code provisions is to deduct up to one month's rent every year, after notifying the landlord, and to repair that which the landlord has neglected, or to quit the premises. (Civ.Code, s 1942.) Section 1942.1 provides that any agreement waiving these rights is void. In recent years the courts have expanded the tenants remedies beyond this statutory scheme. In Hinson v. Delis (1972) 26 Cal.App.3d 62, 68, 72, 102 Cal.Rptr. 661, the plaintiff-tenant took possession of an apartment pursuant to agreement with the defendant-landlord, and thereafter numerous defects developed (in addition to a defective door that existed at the time the tenant entered into the lease) for which the landlord, although informed, failed to make repairs. The tenant withheld rent and was served with a three-day notice to pay rent or quit. The tenant thereupon instituted an action requesting that the landlord be enjoined from filing an eviction action for nonpayment, and asking for a declaratory judgment that he need pay the rent due only after the landlord made repairs. The court held that a warranty of habitability was implied by law in residential leases in California. Because of this warranty, the court found that the tenant was not obliged to pay the full back-rent, but only the reasonable rental value of the defective dwelling. Two years later, the California Supreme Court, in the landmark case of Green v. Superior Court (1974) 10 Cal.3d 616, 619, 111 Cal.Rptr. 704, 517 P.2d 1168, approved of the Hinson decision and its rationale, and further held that the landlord's breach of the implied covenant of habitability could also be raised by the tenant as a defense to an unlawful detainer action instituted by the landlord.

Although neither of these cases resolved the issue of whether the defense of the landlord's breach could be waived,3 the underlying rationale of those holdings, together with the California Legislature statements of the policy of this state and the reported cases of other jurisdictions on the same subject, lead to the conclusion that this defense cannot be waived.

Health and Safety Code section 33250 contains this express legislative finding and declaration of policy:

“. . . there exist in areas of this state residential, . . . areas . . .which are becoming slum or blighted areas because of substandard, insanitary, deteriorated or deteriorating conditions, including (inter alia) . . . defective construction, . . . inadequate maintenance, (and) obsolete system of utilities, . . . all of which hamper or impede proper and economic development of such areas and which impair or arrest the sound growth of the area, community or municipality, and the state as a whole. . . . (P) (The Legislature) further finds and declares that there continues to exist throughout the state a seriously inadequate supply of safe and sanitary dwelling accommodations for persons and families of low income. This condition is contrary to the public interest and threatens the health, safety, welfare, comfort and security of the people of this state . . .” The Legislature went on to hold in the context of its plans to assist in redevelopment projects, that: “It is hereby declared to be the policy of this state to promote the sound growth and development of urban areas . . . through the correction of substandard, insanitary, blighted, deteriorating conditions . . .” (Health & Saf.Code s 33251.) (See also, Green, supra, 10 Cal.3d at 625, fn. 8, 111 Cal.Rptr. 704, 517 P.2d 1168.

The elimination of substandard housing in California is thus a major state policy. Indeed, the magnitude of this legislative concern was further expounded in the Zenovich-Moscone-Chacon Housing and Home Finance Act, where the importance of housing was set out in no uncertain terms:

“The Legislature finds and declares that the subject of housing is of vital statewide importance to the health, safety, and welfare of the residents of this state . . .” (Health & Saf.Code, s 50001.)

“The Congress of the United States has established, as a national goal, the provision of a decent home and a suitable living environment for every American family and the Legislature finds and declares that the attainment of this goal is a priority of the highest order.” (Health & Saf.Code, s 50002.)

The Supreme Court in Green applied these policies and legislative mandates to the landlord-tenant context in arriving at its decision that the habitability breach would constitute a defense for the tenant.

In my opinion, the reasoning of Green cannot be reconciled with any holding other than one which makes the defense not waivable. To hold that a tenant waived the uninhabitability defenses, one would necessarily have to also find that an untrained and inexperienced tenant was responsible to thoroughly inspect his or her apartment and its supporting utilities for possible defects before moving in. The court in Green declared that the landlord was in a much better position to do this: “(T)he increasing complexity of modern apartment buildings not only renders them much more difficult and expensive to repair than the living quarters of earlier days, but also makes adequate inspection of the premises by a prospective tenant a virtual impossibility; complex heating, electrical and plumbing systems are hidden from view, and the landlord, who has had experience with the building, is certainly in a much better position to discover and to cure dilapidations in the premises. Moreover, in a multiple-unit dwelling repair will frequently require access to equipment and areas solely in the control of the landlord.” (10 Cal.3d at 624, 111 Cal.Rptr. at 709, 517 P.2d at 1173.)

Even if one assumed that the tenant had the ability and opportunity to discover defects, the tenant generally, would not be in a position to do anything about it. Quoting again from Green : “(T)oday's urban tenant is more mobile than ever; a tenant's limited tenure in a specific apartment will frequently not justify efforts at extensive repairs. Finally, the expense of needed repairs will often be outside the reach of many tenants for ‘(l)ow and middle income tenants, even if they were interested in making repairs, would be unable to obtain any financing for major repairs since they have no long-term interest in the property.’ (Javins v. First National Realty Corporation (1970) 138 U.S.App.D.C. 369, 376-377, 428 F.2d 1071, 1078-1079.)” (10 Cal.3d at 624-625, 111 Cal.Rptr. at 709, 517 P.2d at 1173.)

Finally, the true economic realities make waiver unrealistic in today's urban housing market, where the demand for rental dwelling places greatly exceeds the supply: “(T)he scarcity of adequate housing has limited further the adequacy of the tenant's right to inspect the premises; Even when defects are apparent the low income tenant frequently has no realistic alternative but to accept such housing with the expectation that the landlord will make the necessary repairs.” (Green v. Superior Court, supra, at p. 625, 111 Cal.Rptr. at p. 709-710, 517 P.2d at p. 1173-1174.) (Emphasis added.)

In Foisy v. Wyman (1973) 83 Wash.2d 22, 515 P.2d 160, the Supreme Court of Washington was confronted with an underlying factual situation almost identical to the instant case. The plaintiff-landlord brought an unlawful detainer action against defendant-tenant for non-payment. The court held that the landlord's breach of the implied covenant of habitability was a proper defense, and one which could not be waived by the fact that the defendant actually knew of the existence of a substantial number of defects when first moving in, and notwithstanding the fact that rent was consequently at a reduced rate.4 In response to the argument that a tenant ought to be able to accept uninhabitable conditions and bargain for a reduced rent, the court said:

“We believe this type of bargaining by the landlord with the tenant is contrary to public policy and the purpose of the doctrine of implied warranty of habitability. A disadvantaged tenant should not be placed in a position of agreeing to live in an uninhabitable premises. Housing conditions, such as the record indicates exist in the instant case, are a health hazard, not only to the individual tenant, but to the community which is exposed to said individual . . . (S)uch housing conditions are at least a contributing cause of such problems as urban blight, juvenile delinquency and high property taxes for conscientious landowners.” (515 P.2d at 164-165.)

I think the trial court erred in instructing the jury, in effect, that the implied warrant could be impliedly waived if the tenant knew at the time of occupancy, or reasonably should have known, that the premises were uninhabitable.5

The decision in Quevedo v. Braga (1977) 72 Cal.App.3d Supp. 1, 140 Cal.Rptr. 143, cannot be reconcilable with my conclusion and should be disapproved. In Quevedo, the plaintiff-tenant occupied an apartment owned by defendant-landlord for approximately eleven months, during which time he complained to the landlord, to no avail, about such alleged uninhabitable conditions as vermin infestation and defective plumbing. After moving out, plaintiff brought a suit against the landlord seeking retroactive rent abatement, basing his action on the landlord's alleged breach of the implied warranty of habitability. The appellate department correctly held that a landlord's breach of the implied warranty of habitability gave rise to an affirmative cause of action for damages by the tenant, including retroactive rent abatement, irrespective of the fact that the tenant was no longer in possession of the dwelling. However, the court declared, among others, the following to be the elements of the cause of action for breach of this warranty: that “the defective condition was unknown to the tenant at the time of occupancy;” that “the effect on habitability of the defective condition was not apparent upon a reasonable inspection;” and that “(n)otice was given to the landlord within a reasonable time after the tenant discovered or should have discovered the breach of warranty.” There is no perceptible distinction between barring a tenant's right to sue because proof of no waiver is an element of the cause of action, and the case here, where the trial court erroneously required no implied waiver as an element of the defense. For the same reasons that there can be no waiver of the defense, I can see no logical basis for waiver of the right to bring a suit. The appellate department's reliance on Square Deal Mach. Co. v. Garrett Corp. (1954) 128 Cal.App.2d 286, 290-292, 275 P.2d 46, 52 A.L.R.2d 893, and Pollard v. Saxe & Yolles Dev. Co. (1974) 12 Cal.3d 374, 377-378, 115 Cal.Rptr. 648, 525 P.2d 88 was misplaced. Square Deal stands for the proposition that if a commercial buyer of goods takes possession of the goods, fails to inspect them within a reasonable time, and the goods contain defects which are discoverable, the buyer loses the right to subsequently complain of the condition of the goods. This rule has been codified in section 2607 of the Uniform Commercial Code. The reasons for the application of this rule to buyers of goods are inapposite in the context of the modern-day urban apartment dweller for reasons outlined above. Pollard holds that implied warranties of fitness and quality applicable to the sale of goods, are also applicable to the sale of newly-constructed housing. Additionally, Pollard held that a plaintiff-buyer must give the defendant-seller notice of the alleged defect within a “reasonable” time after discovery of the breach. Once again, this notice requirement was founded on the Court's analogy between sale of homes and sale of goods (citing U.Com.Code, s 2607(3)).

It might be argued that a non-waiver rule could ultimately result in higher rents to low-income dwellers because of possible burdens on the landlord of the high cost of repairs. The argument further runs this course: if the tenant were able to waiver the habitability breach, then the tenant could strike a bargain with the landlord to move into a dwelling which he or she knew was defective in exchange for a low rent. If the defense were not waivable, however, this bargaining would be precluded the landlord would have to repair the units to avoid the habitability breach, and the costs to repair and maintain would be passed on to the prospective tenants in the form of increased rents. Although relevant, the argument should be rejected. Firstly, it fails to take into account that the modern urban dweller, in a time of housing shortage, has virtually no bargaining power. As highlighted by the Supreme Court in Green, “(T)he mechanism of the ‘free market’ no longer serves as a viable means for fairly allocating the duty to repair leased premises between landlord and tenant.” (10 Cal.3d at p. 625, 111 Cal.Rptr. at p. 709, 517 P.2d at p. 1173.) Secondly, assuming such a bargain could be struck, an agreement to allow the blight of “uninhabitable” housing would be in conflict with the expressed policy of California. And, thirdly, a waiver by an unskilled tenant of conditions, which cannot be readily determined, would be unacceptable (see Green v. Superior Court, supra, p. 624, 111 Cal.Rptr. 704, 517 P.2d 1168.)

The majority are concerned with the “mischief” which an unscrupulous tenant could bring on a landlord by knowingly renting a delapidated dwelling and seeking a “free ride” by refusing rent. One certainly cannot ignore such a prospect, but the possibility is insignificant. The rule which I believe to be the correct one would say that if a tenant refuses to pay rent, he or she is subject to an unlawful detainer action in which the tenant could assert the uninhabitability defense. If successful, (that is the tenant proves the premises were uninhabitable in some respect6 ) “he may demonstrate that his nonpayment of rent was justified and that no rent is in fact ‘due and owing’ to the landlord. Under such circumstances, of course, the landlord would not be entitled to possession of the premises. (citations).” (Green, supra, p. 635, 111 Cal.Rptr. p. 717, 517 P.2d p. 1181)

However, in mitigation of the consequences of such a rule, the court in Green cited with approval the following “procedural mechanism” layed out in Hinson and other cases: “ ‘If the tenant claims that all or a part of the rent is not due because of defects in the premises, the trial court may, during the pendency of the action and at the request of either party, require the tenant to make the rental payments at the contract rate into court as they become due for as long as the tenant remains in possession. At the trial of the action the court can then determine how the rent paid into court should be distributed.’ (26 Cal.App.3d at p. 71, 102 Cal.Rptr. (661) at p. 666.) Such a procedure can serve as a fair means of protection of landlords from potential abuses of the proposed warranty of habitability defense. (See National Conference of Commissioners on Uniform State Laws, Uniform Residential Landlord and Tenant Act (1972) s 4.105.)” (Green, supra, p. 637, 111 Cal.Rptr. p. 718, 517 P.2d p. 1182.)7

The public policy considerations behind the implied covenant of habitability relate to the maintenance of healthy dwellings for our people, they do not compel the maintenance of slums. The only “mischief” I can find in the rule which I feel is required in this case is that landlords would have to provide habitable dwellings or not expect the aid of the courts in collecting their rents.

I, therefore, also believe that the trial court erred in its instruction that the jury could find for the landlord if the landlord was not given a reasonable opportunity to repair because of insufficient time or because the rent had been held back. In essence this instruction advised the jurors that the landlord was excused for the habitability breaches if the withholding of rent prevented the landlord from making the repairs, or the landlord was given inadequate time. Although I recognize that a landlord might find that the loss of cash flow resulting from tenants withholding rent as a consequence of claimed habitability breaches (even where the conditions were known before the tenancy began) could well impair the landlord's financial capacity to correct those very breaches. I do not see that such a state of facts can amount to an exception to the established rule from Green that where the warranty of habitability has been breached, the tenant may withhold rent and prevail in an unlawful detainer action.

FOOTNOTES

1.  The joint settled statement states that although a court reporter was present during the entire proceedings, it was estimated that a reporter's transcript would cost $8,000.

2.  The body of the letter read as follows:“This letter is to inform you that the building in which you live has been sold and we have been engaged to manage the property for the new owners. You are hereby given notice that as of July 1st 1977 your rent will be raised to $255.00 per month. High mortgage payments, rising taxes, rising utility charges and high maintenance costs make it necessary for the new ownership to raise the rents to this level. Your rent will continue at the present level through the month of June.“The new owners intend to start immediate extensive refurbishment of the common areas of the building to make it a more pleasant place to live. We are most eager to retain you all as tenants but if the rent increase presents a problem and you must give notice, we will understand. If this is necessary please give your notice in writing when you pay your rent June 1st.“It is this company's policy to have all tenants sign one of our rental agreements at the time we take over management of a building. We would appreciate it if you would call us as soon as possible at 399-8032 so that we can set up a time for you to come in and sign your agreement, this should be done no later than June 1st when you make your rent payment. The address is 1312 W. Washington Blvd. and all rents should be brought or mailed to this address starting June 1st. Please make checks payable to WESTERN INVESTMENT PROPERTIES INC.“The new owners have arranged to make some parking spaces available at a nearby parking lot for tenants at the monthly rent of $10.00 if you would be interested in renting one of these spaces or have any questions about this letter please call me.“We are pleased to announce that Mr. Allen will continue as resident manager any problems concerning the property should be referred first to him. If he is not available call 399-8032 and in an Emergency only call 392-3911 and the operator will refer your call.” (Original italics.)

3.  On September 29, 1977, the consolidated cases of James E. Knight et al. v. Robert Martin (L.A. Mun. Ct. No. 162732), James E. Knight et al. v. James McClure (L.A. Mun. Ct. No. 162722), James E. Knight et al. v. Cecelia DeCaprio (L.A. Mun. Ct. No. 162725) and James E. Knight et al. v. Joyce Blumenthal (L.A. Mun. Ct. No. 162723) were tried. On October 12, 1977, by stipulation of the parties, the cases of James E. Knight et al. v. Clara Breit (L.A. Mun. Ct. No. 162730) and James E. Knight et al. v. Maria Hallsthammar (L.A. Mun. Ct. No. 162721) were consolidated with the Martin, McClure, Norton, DeCaprio and Blumenthal cases. All seven cases went to the jury for a verdict. The jury was unable to reach a verdict in the cases of defendants Robert Martin, James McClure and Brian Norton, but rendered unanimous verdicts against defendant Tenants Joyce Blumenthal, Clara Breit, Maria Hallsthammar and Cecelia DeCaprio.The appellant Tenants' opening brief states: “Appellant Joyce Blumenthal is no longer proceduting (Sic ) her appeal. A satisfaction of judgment has been entered as to her and she has, as have all appellants, surrendered the premises in question.”

4.  Civil Code section 823 reads as follows:“Whatever remedies the lessee of any real property may have against his immediate lessor, for the breach of any agreement in the lease, he may have against the assigns of the lessor, and the assigns of the lessee may have against the lessor and his assigns, except upon covenants against incumbrances or relating to the title or possession of the premises.”

1.  On the implied warrant of habitability the court instructed:“In order to establish a defense to an action for unlawful detainer based on the defense of breach of the warrant of habitability, the tenant must establish the following elements:“1. The existence of a material defective condition affecting habitability including common areas.“2. The defective condition was unknown to the tenant at the time of the occupancy of his or her apartment.“3. The effect on habitability of the defective condition was not apparent to the tenant upon a reasonable inspection.“4. Notice was given the landlord within a reasonable time after the tenant discovered or should have discovered the breach of warrant.“5. The landlord was given a reasonable time to correct the defect while the tenant remained in possession.”

2.  A “dwelling unit” under Civil Code section 1940, subsection (c) means a structure used as “home, residence, or sleeping place by one person who maintains a household or by two or more persons who maintain a common household.”

3.  In footnote 3 of Green, the court stated that the question of whether the tenant can be held to have “assumed the risk” of uninhabitable premises, by renting an apartment which is uninhabitable upon first occupying it, was not presented by the facts of that case and would therefore not be addressed. (10 Cal.3d 621, 111 Cal.Rptr. 704, 517 P.2d 1168.)

4.  Cases in other jurisdictions have also reached this conclusion, including Fair v. Negley, 257 Pa.Super. 50, 390 A.2d 240, 243-245, and McKenna v. Begin, 3 Mass.App. 168, 325 N.E.2d 587, 590.

5.  The appellate department also found that there could be no Express waiver of the implied warranty of habitability. Although there was no express written or oral waiver in issue in the instant case, I agree with the appellate department that there is no basis for distinction. (See Green, 10 Cal.3d 625, fn. 9, 111 Cal.Rptr. 704, 517 P.2d 1168 and Civ.Code, s 1942.1 which voids any lease provision waiving a tenants' rights under Civ.Code, ss 1941, 1942.) In the area of residential tenancies addressed by Green, the Supreme Court has found that true free market dealing generally does not exist. (See, e. g., 10 Cal.3d at p. 625, 111 Cal.Rptr. 704, 517 P.2d 1168.)

6.  It should also be pointed out that the “implied warranty of habitability does not require that a landlord ensure that leased premises are in perfect, aesthetically pleasing condition, but it does mean that ‘bare living requirements' must be maintained. In most cases substantial compliance with those applicable building and housing code standards which materially affect health and safety will suffice to meet the landlord's obligation under the common law implied warranty of habitability we now recognize.” (Green, supra, p. 637, 111 Cal.Rptr. p. 718-719, 517 P.2d p. 1182-1183)

7.  The factors mentioned in Quevedo of ignorance or lack of ignorance of defects, notice to the landlord and reasonable inspection which I believe cannot be considered as elements of the defense of uninhabitability might well still be considered in the determination of reasonable rent due.

HANSON, Associate Justice.

LILLIE, Acting P. J., concurs.

Copied to clipboard