Calderon v. Khan
| Decision Date | 01 September 2021 |
| Docket Number | No. 20-0489,20-0489 |
| Citation | 966 N.W.2d 337 (Table) |
| Parties | Jose CALDERON, individually and as next friend to E.G. and A.G., and Veronica Gonzales, individually and as next friend to E.G. and A.G., Plaintiffs-Appellants, v. Saber KHAN, Defendant-Appellee. |
| Court | Iowa Court of Appeals |
Benjamin Bergmann and Jessica Donels of Parrish Kruidenier Dunn Gentry Brown Bergmann & Messamer L.L.P., Des Moines, and Christopher Stewart of Gribble, Boles, Stewart & Witosky Law, Des Moines, for appellants.
Gregory G.T. Ervanian of Ervanian & Cacciatore, L.L.P., Des Moines, for appellee.
Considered by Bower, C.J., Mullins, J., and Doyle, S.J.*
Jose Calderon and Veronica Gonzales, individually and as next friends to E.G. and A.G., appeal the district court's ruling on their petition forwarding claims of (1) unfair and deceptive acts and practices, (2) breach of express warranty of habitability, (3) breach of implied and statutory warranty of habitability, and (4) declaratory and injunctive relief. They claim (1) the court erred in dismissing counts one and two, as well as count four in relation to counts one and two; (2) the court's damages calculation on count three for past pain and suffering and emotional distress was not supported by substantial evidence; (3) the court erred in not awarding punitive damages; and (4) the court erred in only awarding one-half of their requested attorney fees.
The appellants’ February 2018 petition alleged the following facts. Nearly two decades ago, the appellants entered a one-year lease to rent an apartment from Saber Khan. After expiration of the lease, the appellants remained in the apartment on a month-to-month basis. In or about 2010, the appellants "began to notice infestations that included bed bugs, mice and cockroaches." They immediately notified Khan of the infestations. Khan took no action to remedy the situation. On one occasion in 2017, Khan sent an exterminator, but the problems were not remedied. Khan's failure to remedy the infestations caused the appellants and their children to suffer "bed bug bites, loss of sleep, anxiety, aggravation, inconvenience, emotional distress, health-related problems and loss of personal property."
According to the petition, the apartment was "constructively uninhabitable," "endangered the plaintiffs’ well-being," "was in violation of housing and health and safety codes and had material defects rendering it unsafe or unfit for habitation," and Khan "knew of the infestations but claimed the apartment was inhabitable and ... impliedly represented that the apartment was inhabitable without remedying the infestations." Khan also continued to collect full rent payments. The appellants alleged Khan "used unfair and deceptive acts and practices," and his actions "constituted willful and wanton disregard for the[ir] rights and safety." The petition also alleged the lease "included an express warranty of habitability," Khan had a contractual duty to remedy the infestations, and he materially breached the warranty by failing to do so. The appellants also claimed Khan failed to maintain fit premises as required by Iowa Code section 562A.15(1)(a)(2) (2018).
The appellants filed their petition in February 2018. For count one, they alleged Khan engaged in prohibited practices under Iowa Code chapter 714H, the Private Right of Action for Consumer Frauds Act. They requested an award of attorney fees pursuant to section 714H.5(2) and treble damages under section 714H.5(4). For count two, they alleged Khan breached an express warranty of habitability of the rental lease1 and requested an award of damages under section 562A.21(2). For count three, they claimed Khan breached an implied and statutory warranty of habitability under section 562A.15(1)(a)(2) for failing to "make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition." They likewise requested damages for this claim under section 562A.21(2). For count four, the appellants requested declaratory and injunctive relief, namely that the court require Khan to remedy the infestation.
In May 2018, following unsuccessful attempts to serve Khan with the petition, the appellants filed a motion for additional time for service and alternate means for service. The request for additional time was granted, but the request for alternative means of service was denied. By September, the court entered an order authorizing the appellants to effectuate service by alternative means. In February 2019, the court entered an order confirming the appellants’ compliance with alternative service and directing the matter to proceed. After the court entered an order finding compliance with service by publication, and absent an answer from Khan, the appellants filed a written application for default judgment. Following a hearing on the motion, the court directed the appellants to comply with the notice of intention to file a written application for default provisions contained in Iowa Rule of Civil Procedure 1.972(2) and (3).2 They did so the following day and, more than ten days later, they filed a renewed written application for default requesting the court to enter a default judgment. See Iowa R. Civ. P. 1.972(1)–(2).
The matter proceeded to hearing in February 2020, at which Khan did not appear. Calderon testified to the nature of the infestations and explained Khan continued to collect rent of $475 per month until the appellants stopped paying two months before they vacated the premises in 2018. Also, a video of the nature of the infestation in the apartment was admitted as evidence. Calderon also explained the family suffered medical problems when they were living in the apartment, and they continued to suffer psychologically. He testified the family had to frequently replace clothing, costing roughly $5000.00, and furniture, costing roughly $9000.00. They also spent $600.00 to have the carpets replaced.
Following the hearing, the court found Khan to be in default. The court found credible evidence to be lacking as to the terms of the oral month-to-month lease agreement or "evidence to corroborate their testimony regarding pain and suffering and emotional distress." Apparently, the appellants requested damages in the amount of nearly $1,000,000.00 and attorney fees of $7012.50. The court found the appellants failed to prove their claims under counts one, two, and four, or their claim for punitive damages. However, the court awarded damages as to count three in the amount of $38,250.00.3 The court also awarded the appellants attorney fees in the amount of $3506.25, which was one-half of what they requested.4 The appellants appeal.
Our review of a ruling on default judgment is for legal error. See Gallagher, Langlas & Gallagher v. Burco , 587 N.W.2d 615, 617 (Iowa Ct. App. 1998). We review awards of punitive damages, or lack thereof, for an abuse of discretion. Brokaw v. Winfield-Mt. Union Cmty. Sch. Dist. , 788 N.W.2d 386, 395 (Iowa 2010). Attorney fee awards are also reviewed for an abuse of discretion. NCJC, Inc. v. WMG, L.C. , 960 N.W.2d 58, 61 (Iowa 2021).
The appellants argue the court erred in dismissing counts one (consumer fraud), two (breach of express warranty of habitability), and four (declaratory and injunctive relief).
Because counts one and two were not for a sum certain, the court was authorized to order judgment be entered and then "hear any evidence or accounting required to warrant the judgment." See Iowa R. Civ. P. 1.973.5 The court found Khan to be in default and adjudicated him as such. In conjunction with the default hearing, absent an answer from Khan, the facts contained in the petition were deemed admitted, except for, among other things, "[a]llegations of value or amount of damage." Iowa R. Civ. P. 1.405(3)(a) ; accord Hallett Constr. Co. v. Iowa State Highway Comm'n , 154 N.W.2d 71, 74 (Iowa 1967). All that remained to be done at this point, aside from the order for and entry of default, was "the determination of the amount of damages to be awarded." Hallett , 154 N.W.2d at 74.
On appeal, the appellants agree "the only issue to be decided at the February 7, 2020 hearing was damages" but complain "the district court went well beyond that, dismissing three of plaintiffs’ claims and the request for punitive damages," which "led the district court to discount plaintiffs’ claims for damages and attorneys’ fees." But we interpret the district court's ruling to be a finding that the appellants failed to prove additional damages on the dismissed claims. All of the theories for relief were based on the same circumstances and resulting injuries. "A successful plaintiff is entitled to one, but only one, full recovery, no matter how many theories support entitlement." Revere Transducers, Inc. v. Deere & Co. , 595 N.W.2d 751, 770 (Iowa 1999) (citation omitted). "Duplicate or overlapping damages are to be avoided." Id. (citation omitted). The district court's dismissal of counts one and two amounted to a simple finding of the non-existence of any non-duplicative damages. And, except as is discussed below, the appellants do not complain of the award of monetary damages under count three based on the evidence presented. While the court characterized the claims as "dismissed," in reality the court did what the appellants claim it did not—determine "whether plaintiffs established their right to damages." We affirm on this point, but we vacate any dismissal language in the court's ruling and modify it to simply hold the appellants failed to show non-duplicative actual and compensatory damages on counts one and two that were not awarded under count three. We also note that, because the appellants had vacated the apartment by the time of trial, their request for declaratory and injunctive relief under count four was moot. See In re Marriage of White , 912 N.W.2d 494, 498 (...
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