Tango v. Willis, No. 1501-03 Cncv (Katz, J., Oct. 15, 2004)



[The text of this Vermont trial court opinion is unofficial. It has been
reformatted from the original. The accuracy of the text and the
accompanying data included in the Vermont trial court opinion database is
not guaranteed.]



STATE OF VERMONT                                       SUPERIOR COURT
Chittenden County, ss.:                           Docket No. 1501-03 CnCiv



TANGO PROPERTIES

v.

WILLIS and STEELE



                         FINDINGS OF FACT
                        CONCLUSIONS OF LAW
                       AND NOTICE OF DECISION



       This matter was tried to the court on September 22, 2004. On the
basis of the evidence presented, the following decision is announced.

                           FINDINGS OF FACT



                                      1
1.      Landlord Tango rented to tenants Willis and Steele the second floor
apartment at 16–18 Johnson Street, an old building in Burlington’s Old
North End. They executed a written lease effective May 1, 2003, expiring
April 30, 2004. Monthly rent was $1140.

2.      Although the printed form lease provided for the landlord to supply
“gas,” which we understand was meant to denote heat, the parties altered
the form to say “landlord will have individual meters set up by 9/1/03. . . .”
It was undisputed that the meaning of this alteration was that the landlord
would substitute modern gas heaters inside the apartment unit, and
disconnect the old steam boiler in the basement, which served both
apartments. The effect of this change was clearly understood to mean that
tenants would thereafter have to pay for the gas to heat their apartment.

3.        Landlord did install the new heating appliance. Tenants complain
that it did not uniformly heat the entire apartment. Instead, they testified
that it would be 80–85E in the kitchen while only 60–65E in the “front
rooms” or bathroom. It appears uncontested that Burlington’s code
enforcement official inspected the apartment with the specific purpose in
mind of checking out the heat source, last December, and did not find any
reason to criticize the landlord for the new equipment. We also find that
tenants were not careful about closing the storm windows during the winter.
We decline to find that the heating appliance was inadequate, according to
the requirements of Burlington’s code. Although the inspector testified that
he still wished to be delivered some sort of specification sheet regarding the
appliance, we cannot find that the failure to deliver a spec sheet actually
caused harm or otherwise indicates some sort of inadequacy.

4.     The lease amendment also notes “hot water for laundry to be
provided by landlord.” Apparently after this lease was made between the


                                      2
parties, the City determined that the washer and dryer located in the
basement for tenant use was improperly installed. As a result, landlord had
them removed. Despite the provision about hot water for laundry, there is
no explicit requirement that the appliances be provided, and there was
further no proof regarding loss for lack of a washer and dryer or for failure
to deliver hot water.

5.      There was a separate hot water issue, in that the installation of new
gas heaters was accompanied by substantial re-piping of the gas supply by
the Gas Company. This resulted first in this apartment’s hot water being
turned off, and then the discovery that the hot water supplies for the two
apartments were switched. This was all the doing of the Gas Company.
The landlord was not negligent in relying on that company. All problems
were very quickly rectified. No proven damages.

6.      The interior of the apartment was habitable during the period of this
tenancy. There were minor problems but none that rendered it unfit for
human habitation.

7.       The front and rear porches had code deficiencies, as did the
stairway up to the rear porch. The landlord made some efforts to repair
them, which were at times amateurish. For example: installing pressure
treated floor boards without affixing them to the porch joists and then
affixing them with one row of screws going down the middle, instead of a
row on each side. The landlord was also slow to repair the stairs.
However, we are persuaded that the landlord’s efforts to repair the stairs
were effectively stymied by the tenants, who refused access to their
apartment. Landlord would call up and leave an answering machine
message “I will have to have access to your apartment in two days.” He
would arrive to find a sign posted on the front door denying access,


                                      3
“Trespassers will be prosecuted!! This includes entry for repairs, Pike!”
(Punctuation in original).

8.       Another front door sign also read “No Notice from Lawyer = NO
ENTRY.” This apparently carried out a unilateral decision by the tenants
to refuse to communicate directly with the landlord on such issues as access
for repairs, insisting instead that all communications go through their
respective lawyers. Such a position has the effect of increasing the cost for
the landlord.

9.       Tenants moved on May 1. They were delinquent in the payment of
rent several times, and stopped paying it in October. This action was
commenced December 3, 2003. A stipulated rent escrow order was entered
January 23, 2004, and rent was paid to the clerk of court from that time
until the tenants vacated the apartment. Hence, from October 1 through
January 23, no rent was paid. At $1,140 per month, three full months
equals $3,420. The first 23 days of January equal $845. Thus, $4,265 was
not paid in rent.

10.      When the parties agreed to a rent escrow of $900, that was a
temporary compromise regarding the rent escrow order. There is nothing to
indicate that it constituted a binding stipulation as to fair rent, or fair rent in
the face of some code violations. As this reduction resulted in a $240 per
month savings to the tenant, over the rent provided in the lease, it
constituted five months’ savings of $1,200, plus an additional $80 for the
balance of January, or $1,280 in total.

11.    When this lease was coming toward its end, communications had
broken down between the parties. Although this may have been somewhat
more the fault of tenants, who were constructing artificial barriers by only


                                         4
recognizing communications through the attorneys, we are not prepared to
conclude that any result from the breakdown was their fault. Nevertheless,
at the end of the written lease period, the landlord did not know if the
tenants would be vacating, but he assumed that they would be. He assumed
this although they were contesting this eviction case in court and had been
paying the rent escrow in a roughly timely manner. Assuming that the
tenants were leaving at the end of April, he made a new lease to re-let the
apartment starting May 1. As we now know, these tenants did not leave
May 1, so the new tenants could not move it. Feeling bound by the
obligations of his new lease, landlord put up the new tenants in a hotel for a
few days, reimbursed them for their eating out, and then reached a financial
settlement with them when they had to lease other premises at a higher cost.
He seeks recovery of these costs, and he proved their amounts.

12.       We are not persuaded that tenants’ work to improve the apartment
or its stairway were substantial, such that they should receive a credit for
that work. There was no proof of any agreement with the landlord for such
a credit. When tenants paint the living room floor mauve, without
permission, there is no basis for concluding that such an alteration will be
of any value to the landlord in renting to the next tenants.

13.      Tenant Steele apparently tripped on the cellar stairs, carrying her
empty laundry basket down to retrieve a load of laundered clothes. She
testified to have sprained her ankle, missed a day of work, and suffered
pain as a result. There was no proof that these interior cellar stairs did not
comply with City code. We are not persuaded that the landlord’s
maintenance of those stairs was somehow negligent. We make no award
on this account.

14.     When they finally vacated, tenants left behind junk that had to be


                                       5
removed and a number of messes that had to be cleaned up. We are
persuaded the following items were caused by these tenants, and the
amounts claimed are reasonable:
Cleaning                                $      240
Repaint bedroom wall                            70
Replace broken lock                       67
Refinish floor painted mauve                   990
Misc repairs and hardware replacement          110
Total                                   $    1,477

15.      Tenants did not pay July rent into the court, did not actually leave
the apartment by July 1, left items behind when they did vacate July 4, and
did not tell landlord that they had no interest in retrieving those items,
under circumstances in which the law bars the landlord from just throwing
it out. Tenants should therefore have to pay for July rent. They also are
entitled to a credit for their security deposit. These items are a wash.

                        CONCLUSIONS OF LAW

A.     Tenants cannot complain of repairs not made, when they denied
       landlord access to make those repairs. See Hilder v. St. Peter, 144
       Vt. 150, 158–59 (1984) (modern leases expect landlord to maintain
       premises and come onto property to make repairs).

B.     No party to a contract has the unilateral right to increase the
       transaction costs of another, as by insisting that all communications
       go through the lawyers. Such an edict violates the implicit duty of
       good faith and fair dealing. Carmichael v. Adirondack Bottled Gas
       Corp., 161 Vt. 200, 208 (1993). The duty of good faith is “to ensure
       that parties to a contract act with ‘faithfulness to an agreed common


                                      6
     purpose and consistency with the justified expectations of the other
     party.’” Id. (quoting from the Restatement (Second) of Contracts §
     205 cmt. a (1981). Although this landlord may not always have
     been timely and may have committed some errors, such as leaving a
     door open, such that the cat exited, he did not abuse these tenants in
     any way suggesting that they were justified in refusing to
     communicate with him except through the attorneys. Cf. Hilder, 144
     Vt. at 154–57 (landlord completely ignored tenants repeated requests
     to repair basic services).

C.   Failure of the dwelling to comply with an applicable code may
     constitute an affirmative defense to the obligation to pay rent. Id. at
     160–61. As such, it is the tenant’s duty to prove the facts necessary
     to support a conclusion of such noncompliance. Id. When tenants
     raise the issue of the space heater not being able to heat one or
     another room, that raises a fact question, on which they bear the
     burden of persuasion. When, in turn, the housing inspector testifies
     that he inspected it, was “concerned” about its ability to heat all the
     rooms, and that he never received a specification sheet from the
     landlord, despite a request therefore, that is actually insufficient
     proof. The warranty of habitability, which is all we enforce here,
     does not require the production of specification sheets. It remains
     the tenants’ burden to persuade the factfinder that the heater, in this
     instance, was insufficient to satisfy code requirements.

D.   There clearly was some degree of code noncompliance in the
     structure, although any significant noncompliance was in the outdoor
     porches and stairs. It is appropriate for the court to consider the
     extent to which rent should be reduced for such noncompliance.
     Given the facts that the noncompliance was external to the dwelling


                                     7
     unit and that tenants interfered with the landlord’s efforts to repair,
     such as by barring him access to electric outlets for using a power
     saw, we consider that a $100 per month credit is fair against the rent.
     Although the lease rental of $1,140 may seem high for a second
     floor apartment in a somewhat rundown building, this is very close
     to Burlington’s downtown, and the lease rental must be considered
     to be fair market price, excepting only code noncompliance. Doing
     the math, the tenants owe $4,265 in wholly unpaid rent, and $1,280
     saved during the escrow period, totaling $5,555 owing in rent.
     Against this, they are entitled to a credit of $1,200 for
     noncompliance of the stairs and porches, at least for some period of
     their tenancy. That leaves a net balance of $4,355.

E.   When one party breaches a lease, as in a breach of any contract, the
     other has the duty to mitigate its damages. O’Brien v. Black, 162
     Vt. 448, 453 (1994). Here, it would appear that tenants did, in fact,
     breach the lease, as it provides for no holding over. See Lease ¶ 1
     (“Tenant may not remain in possession of the leased premises
     beyond dusk 4/30/2004. Tenancy ends with the expiration of this
     lease.”) But in assuming that these tenants would honor their
     contract and leave, and undertaking new lease obligations on the
     basis of this assumption, did landlord assume too much? In view of
     the fact that his undertakings, and resulting damages, far exceed the
     monthly rental value of the premises, we think he did, and thereby
     failed to mitigate his damages. Had landlord done nothing, at the
     end of the lease term, he would have faced one of two alternatives:
     Either the tenants, as in fact occurred, stayed in the apartment and
     continued paying the rent into the court’s escrow account, or they
     did not pay their required monthly escrow amount. In the first event,
     the landlord would have suffered no loss. In the second event,


                                    8
       landlord would have been eligible to receive a partial judgment for
       possession within a few days, and would have effectively recovered
       possession before the month ran out. Hence, even in the second
       event, his damages would have been something less than a full
       month’s rent. Such damages, of course, assume an unsatisfied
       judgment at the end of the process. But when, as here, landlord
       unilaterally undertook new obligations, and then had to pay out
       considerably more than twice the May monthly rent to satisfy those
       obligations, he failed to mitigate his damages. For these reasons, we
       decline to award the claimed damages.

                          NOTICE OF DECISION

       Plaintiff landlord entitled to recover back rent plus repairs, $4,355
plus $1,477. Landlord entitled to payment of amounts held in escrow by
the clerk of court. Landlord entitled to costs and reasonable attorneys fees.
Landlord shall submit a proposed form of judgment.




       Dated at Burlington, Vermont, _________________, 2004.




                                            __________________________
                                                                 Judge



                                            __________________________
                                                          Assistant Judge


                                      9
