Henrioulle v. Marin Ventures, Inc.

• Decision Date: 19 January 1978
• Docket Number: S.F. 23619
• Citation: 20 Cal.3d 512,573 P.2d 465,143 Cal.Rptr. 247
• Parties: , 573 P.2d 465 John HENRIOULLE, Plaintiff and Appellant, v. MARIN VENTURES, INC., Defendant and Respondent.
• Court: California Supreme Court

Page 247

143 Cal.Rptr. 247

20 Cal.3d 512, 573 P.2d 465

John HENRIOULLE, Plaintiff and Appellant, v. MARIN VENTURES, INC., Defendant and Respondent.

S.F. 23619.

Supreme Court of California, In Bank.

Jan. 19, 1978.

Stanley A. Feingold, San Anselmo and Allan J. Lipney, San Rafael, for plaintiff and appellant.

Evelle J. Younger, Atty. Gen., E. Clement Shute, Jr., Asst. Atty. Gen., Herschel T. Elkins and Albert Norman Shelden, Deputy Attys. Gen., as amici curiae on behalf of plaintiff and appellant.

David P. Freitas and Freitas, Allen, McCarthy, Bettini & MacMahon, San Rafael, for defendant and respondent.

BIRD, Chief Justice.

Appellant, John Henrioulle, seeks to set aside orders of the superior court granting his landlord, respondent Marin Ventures, Inc., a judgment notwithstanding the jury's verdict and a new trial. Appellant contends that the exculpatory clause in his lease could not relieve the landlord of liability for the personal injuries appellant sustained in a fall on a common stairway in the apartment building. This court agrees.

I

When reviewing the validity of a judgment notwithstanding the verdict, an appellate court must resolve any conflict in the evidence and draw all reasonable inferences therefrom in favor of the jury's verdict. (Quintal v. Laurel Grove Hospital (1964) 62 Cal.2d 154, 159, 41 Cal.Rptr. 577, 397 P.2d 161; Estate of Franco (1975) 50 Cal.App.3d 374, 377, 123 Cal.Rptr. 458.) From the record, it appears that on April 3, 1974, appellant entered into a lease agreement with respondent for an apartment in San Rafael, California. At that time, appellant was an unemployed widower with two children who received public assistance in the form of a rent subsidy from the Marin County Department of Social Services. There was also evidence of a shortage of housing accommodations for persons of low income in Marin County. ¹

The printed form lease agreement which appellant signed contained the following exculpatory clause: "INDEMNIFICATION: Owner shall not be liable for any damage or injury to Tenant, or any other person, or to any property, occurring on the premises, or any part thereof, or in the common areas thereof, and Tenant agrees to hold Owner harmless from any claims for damages no matter how caused."

On May 22, 1974, appellant fractured his wrist when he tripped over a rock on a common stairway in the apartment building. At the time of the accident the landlord had been having difficulty keeping the common areas of the apartment building clean. An on-site manager, whose duties included keeping these areas clean, had proven unsatisfactory and had been terminated in the month prior to the accident. The landlord had also employed an additional person to do maintenance work, but he had worked only a few hours at the apartment building in the month preceding the accident.

A personal injury action was filed on August 23, 1974. ² After a three-day trial, the jury rendered a special verdict under Code of Civil Procedure section 624, consisting of four findings of fact: (1) appellant had been injured as a proximate result of respondent's negligence; (2) appellant was damaged in the sum of $5,000; (3) appellant had been contributorily negligent; and (4) relative fault was to be apportioned at 30 percent for appellant and 70 percent for respondent. ³ After the verdict, the jurors were polled at respondent's request. Initially only eight jurors stated that they had voted in accord with the announced verdict. Expressing surprise at the results of the poll, the jury foreperson volunteered that in separate votes nine or more jurors had concurred as to each of the four questions. The court then asked for a show of hands of those who had "voted in favor of a verdict for the plaintiff," and nine jurors raised their hands. When the jury was polled on the three remaining findings, it developed that although at least nine jurors had concurred as to each finding, they were not always the same nine jurors.

After a discussion with counsel at the bench, the court, without objection from either party, made one last attempt to clarify the verdict. It asked for a show of hands on the initial finding for appellant and noted that jurors Holmes, Andries and Hoffman dissented. Then, treating the other three questions as special findings, the court asked for a show of hands as to each one. The vote was eleven to one that appellant's damages amounted to $5,000, and the court noted the dissenter was juror Holmes. The vote was nine to three that appellant was contributorily negligent and ten to two on the relative fault of each party. The record does not specify which jurors dissented on the last two questions. The court then stated a verdict had been reached and judgment would be entered for appellant in the sum of $3,500. At this point, the jury was discharged.

Thereafter, respondent moved for judgment notwithstanding the verdict, contending that the exculpatory clause in the rental agreement relieved it of liability. ⁴ This motion was granted. Respondent's additional motion for a new trial under Code of Civil Procedure section 629 was granted on the ground that the same nine jurors had not assented to each and every question set forth in the special verdict and, therefore, no verdict had been reached. This appeal followed.

II

In Tunkl v. Regents of the University of California (1963)60 Cal.2d 92, 32 Cal.Rptr. 33, 383 P.2d 441, this court held invalid a clause in a hospital admission form which released the hospital from liability for future negligence. ⁵ This court noted that although courts have made "diverse" interpretations of Civil Code section 1668, ⁶ which invalidates contracts which exempt one from responsibility for certain wilful or negligent acts, all the decisions were in accord that exculpatory clauses affecting the public interest are invalid. (Tunkl v. Regents of the University of California, supra, 60 Cal.2d at pp. 94-98, 32 Cal.Rptr. 33, 383 P.2d 441.)

In Tunkl, six criteria are used to identify the kind of agreement in which an exculpatory clause is invalid as contrary to public policy. "(1) It concerns a business of a type generally thought suitable for public regulation. (2) The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. (3) The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least any member coming within certain established standards. (4) As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. (5) In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional fees and obtain protection against negligence. (6) Finally, as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents." (Id., at pp. 98-101, fns. omitted, 32 Cal.Rptr. at pp. 37-38, 383 P.2d at pp. 445-446.)

The transaction before this court, a residential rental agreement, meets the Tunkl criteria. Housing in general, and residential leases in particular, are increasingly the subject of governmental regulation, the first of the Tunkl criteria. In Green v. Superior Court (1974) 10 Cal.3d 616, 627, 111 Cal.Rptr. 704, 711, 517 P.2d 1168, 1175, this court noted: "The past half century has brought the widespread enactment of comprehensive housing codes throughout the nation; in California, the Department of Housing and Community Development has established detailed, statewide housing regulations (see Health & Saf.Code, § 17921; Cal.Admin.Code, tit. 25, §§ 1000-1090), and the Legislature has expressly authorized local entities to impose even more stringent regulations. (See Health & Saf.Code, § 17951.) These comprehensive housing codes affirm that, under contemporary conditions, public policy compels landlords to bear the primary responsibility for maintaining safe, clean and habitable housing in our state." Moreover, the Legislature in 1970 enacted stricter standards of "tenantability" (see Civ.Code, § 1941.1) and has limited landlords' ability to impose waivers of tenants' rights in leases. (See, e. g., Civ.Code, §§ 1942.1, 1953, 1954.)

A lessor of residential property provides shelter, a basic necessity of life, the second Tunkl criterion. Moreover, the landlord in this case offered to rent his units to all members of the public, the third Tunkl criterion.

Unequal bargaining strength, the fourth Tunkl criterion, is also present. In a state and local market characterized by a severe shortage of low-cost housing, ⁷ tenants are likely to be in a poor position to bargain with landlords. As this court observed in Green, "the severe shortage of low and moderate cost housing has left tenants with little bargaining power through which they might gain express warranties of habitability from landlords . . . ." (Green v. Superior Court, supra, 10 Cal.3d at p. 625, 111 Cal.Rptr. at p. 709, 517 P.2d at p. 1173.)

Finally, the fifth and sixth Tunkl criteria are also present. Thus, it does not appear that respondent made any "provision whereby a purchaser may pay additional fees and obtain protection against negligence," (Tunkl v. Regents of the University of California, supra, 60 Cal.2d at pp. 100-101, 32 Cal.Rptr. at p. 38, 383 P.2d at p. 446) and appellant was exposed to the risk of injury through respondent's carelessness.

However, respondent asserts that the principles discussed in Tunkl do not apply to private residential leases. It is true that Tunkl cites language in Barkett v. Brucato (1953) 122 Cal.App.2d 264,...