Duran v. Housing Authority of City and County of Denver, 86SC269

Decision Date12 September 1988
Docket NumberNo. 86SC269,86SC269
Citation761 P.2d 180
PartiesJoan K. DURAN, Petitioner, v. The HOUSING AUTHORITY OF the CITY AND COUNTY OF DENVER, Respondent.
CourtColorado Supreme Court

Manuel A. Ramos, Claudia E. Abernethy, Denver, for petitioner.

Jimmie D. Mills, Denver, for respondent.

ROVIRA, Justice.

We granted certiorari to review a decision of the Superior Court of the City and County of Denver affirming a judgment of the Denver County Court against petitioner, Joan Duran, in an unlawful detainer action filed by The Housing Authority of the City and County of Denver (D.H.A.). The county court entered a money judgment in favor of the D.H.A. for $114.52, representing rent due and costs, and also awarded possession of petitioner's rental unit to the D.H.A.

We conclude that the D.H.A. waived its right to terminate Duran's lease, and further, that her tender of rent constitutes a valid defense to the unlawful detainer action. Accordingly, we reverse the judgment of the superior court.

I.

The basic facts in this case, as established at trial, are undisputed. Duran and her two children are residents of public housing owned and operated by the D.H.A., a quasi-municipal corporation created to provide housing for low-income persons. See §§ 29-4-201 to -232, 12A C.R.S. (1986).

In line with federal regulations governing public housing, Duran had a lease which detailed, inter alia, the terms of the tenancy, the formula for computing monthly rent, and the procedures involved in the termination of a tenancy. 1 In November 1985, Duran's monthly rent was $71 which she failed to pay because she lost her job and there was a delay in receiving welfare payments.

On November 7, 1985, a notice demanding payment of rent within fourteen days was posted on Duran's premises by the D.H.A. This notice, entitled "Notice of Rent Delinquency and Proposed Lease Termination," was served pursuant to Duran's lease and the federal regulations. 2 Essentially, this notice provided that "unless this rent is fully paid, within fourteen (14) days from the date of the delivery of this notice to you [or November 21, 1985] ..., the Authority intends to terminate and cancel your month to month lease." The notice went on to state "[w]e surely hope that you will make up the rent payments you owe, so that you can remain in your unit." Duran failed to respond to this fourteen-day notice, and on November 25, 1985, the D.H.A. posted a notice on her premises, giving her an additional three days to either pay the delinquent rent or, in the alternative, to vacate the premises and deliver possession to the D.H.A. This three-day notice period is required by state statute. 3

On December 3, 1985, after Duran failed to respond to the three-day notice, the D.H.A. filed a complaint in the Denver County Court seeking recovery of possession of the premises, judgment for rent in the amount of $71, and costs.

On either December 4 or 5, Duran telephoned the D.H.A. housing manager, Archie Smith, and offered to pay the rent for November. As testified to by Smith at trial, she told him "that she was going to try to get the money together ... and would we accept it." He responded "I can't accept it Joan, I have already filed [sic] you in court."

On December 6, 1985, a second fourteen-day notice was served by the D.H.A. on Duran. The language of this notice was identical to that of the first fourteen-day notice, except that it made demand for $144 in back rent, and gave her until December 20 to pay. This amount--presumably covering November and December rent--was a little over double the amount sought in the first fourteen-day notice and three-day notice for only the November rent, and in the complaint filed by the D.H.A. in county court.

On December 19, 1985, during the course of the trial, Duran testified that she had the money to pay the November and December rent and offered it to the D.H.A. for "payment within the fourteen-day period as expressed by the second notice." She argued that this notice was in effect a waiver by the D.H.A. of its right to terminate her tenancy and gave her until December 20 to pay the past due rent. Counsel for the D.H.A. refused the offer on the ground that the D.H.A. was in court on a "perfected right to evict for the failures to pay the rent in November, not in December."

The trial court found "that a waiver had not been established by a preponderance of the evidence. The Court would note case law does clearly establish that a waiver must be intentional and there is no evidence before this Court that there was an intentional waiver." Further, the court concluded that "there has been no tender in the legal definition of the term 'tender' including offering with cash in hand of any payment of rent." Finally, the court determined that although Duran may have been confused by the second fourteen-day notice, estoppel should not be invoked to prevent "manifest injustice" to Duran, as she had not proved her case by a preponderance of the evidence. Judgment was entered in favor of the D.H.A. for possession and rent due at the date of trial in the amount of $114.52.

On appeal, the Superior Court, without specifically addressing the issue of waiver, concluded that the D.H.A. was acting within its rights in terminating Duran's lease:

The filed case in the county court should have given the defendant notice that the plaintiff was going ahead with the F.E.D. [forcible entry and detainer] suit. The state statute was operating at this time and since the defendant had never tendered the rent and was still in possession of the property the trial court was correct in awarding the plaintiff the rent due and the possession of the property.

The court also held that "there never was a tender of the rent with cash in hand. Only words were spoken."

We granted certiorari to consider two issues: (1) Whether the D.H.A. waived its right to terminate Duran's lease by serving a demand for past and future rent on her during the pendency of an unlawful detainer action; and (2) Whether Duran's purported tenders of rent during the pendency of the unlawful detainer action are a defense to that action.

II.

It is established law in Colorado that the three-day notice to quit served upon the tenant pursuant to section 13-40-104(1)(d) constitutes an election by the landlord to terminate the lease unless the notice is rendered ineffective by the tenant's payment of rent. Aigner v. Cowell Sales Co., 660 P.2d 907, 908 (Colo.1983); Barlow v. Hoffman, 103 Colo. 286, 290, 86 P.2d 239, 240 (1938). This right of the lessor to a forfeiture of the tenancy based upon a breach of a lease covenant may be waived; such waiver could operate to bar a lessor from claiming the benefits of a previously given notice of termination. See 2 Powell on Real Property § 250 at 372.195 (1986).

As a general rule, the forfeiture of leases is not favored. Murphy v. Traynor, 110 Colo. 466, 470, 135 P.2d 230, 231 (1943); Sung v. McCullough, 651 P.2d 447, 449 (Colo.App.1982). As a consequence, courts are reluctant to find that a lessee has violated his obligations, sometimes escaping that conclusion by strictly construing the lease provisions against the party seeking to invoke them. Murphy, 110 Colo. at 470, 135 P.2d at 231. See also 2 Powell on Real Property § 231 at 330.60(57).

Even where a lessee has been found to have violated his obligations under the lease, as, for example, by failing to pay rent, the lessor may still be barred from terminating the lease because of a court's finding of waiver on the part of the lessor, or a finding that the lessor is estopped from seeking a forfeiture. 2 Powell on Real Property § 231 at 330.60(60). 4

Waiver has traditionally been defined as the intentional relinquishment of a known right or privilege. Department of Health v. Donahue, 690 P.2d 243, 247 (Colo.1984); People v. Curtis, 681 P.2d 504, 514 (Colo.1984); II Friedman on Leases § 16.501 at 887 (2d ed. 1983). A waiver may be explicit, or it may be implied, for example, when a party engages in conduct which manifests an intent to relinquish the right or privilege, or acts inconsistently with its assertion. Donahue, 690 P.2d at 247. Although an intention to waive a benefit may be implied by conduct, the conduct itself should be free from ambiguity and clearly manifest the intention not to assert the benefit. Id.

Where the material facts are not disputed, the determination of whether there has been a waiver is a matter of law. Sung, 651 P.2d at 449 (citing Tisdel v. Central Savings Bank & Trust Co., 90 Colo. 114, 6 P.2d 912 (1931); and Widman v. Barry, 63 Colo. 427, 168 P. 31 (1917)). A reviewing court, therefore, is not bound by the trial court's conclusion. Weed v. Monfort Feed Lots, 156 Colo. 577, 580, 402 P.2d 177, 179 (1965); Sung, 651 P.2d at 449; Cordillera Corp. v. Heard, 41 Colo.App. 537, 539, 592 P.2d 12, 13-14 (1978), aff'd, 200 Colo. 72, 612 P.2d 92 (1980).

Waiver may be demonstrated "by a course of conduct signifying a purpose not to stand on a right, one leading, by reasonable inference, to a conclusion that the right in question will not be insisted upon." Sung, 651 P.2d at 449 (citing Williams v. Gulick, 170 Colo. 347, 461 P.2d 211 (1969); and Wisherd v. Noonen, 71 Colo. 218, 205 P. 530 (1922)). In describing waiver, this court has declared that "any act done by a landlord with knowledge of an existing right of forfeiture, which recognizes the existence of the lease is a waiver of the right to enforce the forfeiture." Merkowitz v. Mahoney, 121 Colo. 38, 42, 215 P.2d 317, 320 (1949). See also Werner v. Baker, 693 P.2d 385, 387 (Colo.App.1984); Kelley v. Morgan, 42 Colo.App. 223, 225, 595 P.2d 1058, 1060 (1979).

An act of the landlord which is frequently relied upon to establish waiver is the acceptance of rent subsequent to knowledge of the breach of the lease by the lessor. See, e.g., Merkowitz, 121 Colo. at 42, 215 P.2d at 320 (having made his election to accept rent due...

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