Knight v. Hallsthammar

• Decision Date: 13 February 1981
• Citation: 29 Cal.3d 46,171 Cal.Rptr. 707,623 P.2d 268
• Court: California Supreme Court
• Parties: , 623 P.2d 268 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. L.A. 31235.

Page 707

171 Cal.Rptr. 707

29 Cal.3d 46, 623 P.2d 268

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.

L.A. 31235.

Supreme Court of California, In Bank.

Feb. 13, 1981.

As Corrected Feb. 23, 1981.

Ronald L. Rouda, Los Angeles, Robert M. Myers, Venice, and Michael E. Wine, Los Angeles, for defendants and appellants.

Toby J. Rothschild, Marvin E. Krakow, Long Beach, Neil J. Roberts, Delano, David

B. Harrison, San Francisco, Richard A. Elbrecht, A. Paul Griebel, Kathleen E. Doyle, Laura W. Kaplan, Dorothy Jones, Roger Dickinson, Sacramento, Myron Moskovitz, San Francisco, Richard E. Blumberg, Berkeley, Ronald S. Javor, Long Beach, Charles F. Palmer and Carol Kuntz Lysaght, Los Angeles, as amici curiae on behalf of defendants and appellants.

Robert E. Canny, Santa Monica, and David M. Glasser, Los Angeles, for plaintiffs and respondents.

BIRD, Chief Justice.

This court must decide whether a residential tenant may be held to have impliedly waived a landlord's breach of implied warranty of habitability by (1) continuing to live in premises despite knowledge of the defects or (2) failing to allow a landlord a reasonable time to repair before withholding rent. There is the additional question as to whether an unlawful detainer action may be defended based on a breach of implied warranty of habitability where defects in the premises predated the current ownership of the building.

I.

On May 18, 1977, ¹ plaintiff landlords became owners of a 30-unit apartment building at 1305 Ocean Front Walk in Venice, California. They had bought the property from a Norman Baker and his parents.

On May 19th, Western Investment Properties Inc. (hereinafter W.I.P.), which had been hired by plaintiffs to manage the property, sent a letter to the tenants indicating there would be a substantial increase in the rent. On May 26th Clara Breit, as representative of the "1305 Ocean Front Walk Tenants Association," sent a letter to W.I.P. stating that the tenants would withhold all future rent payments because of both the state of disrepair of the apartment building and the new rent increases. Neither W.I.P. nor plaintiffs responded to this letter.

When confronted in late May by tenants and the news media, an employee of W.I.P. allegedly indicated that the only repairs that would be made were to the vacant apartments and any common areas. No repairs were contemplated as to the occupied units until they became vacant. In early June, the tenants were served with three-day notices to pay the new rent or face eviction. These consolidated unlawful detainer actions by plaintiffs followed.

At the trial below, evidence was introduced by the tenants that plaintiffs had breached their implied warranty of habitability. The tenants complained of wall cracks, peeling paint, water leaks, heating and electrical fixture problems, broken or inoperable windows, rodents and cockroaches, and the lack of sufficient heat in the apartments. All of these conditions existed before plaintiffs acquired ownership. The defendants had personally complained to the manager about the conditions of their apartments before service of the three-day notices and before plaintiffs' ownership. Some complaints had also been lodged with Norman Baker. Only a portion of the complaints had resulted in corrections.

Plaintiff James E. Knight testified that he had first inspected some of the units during escrow in April, and, in August, had made a detailed itemization of needed improvements. Knight also testified that he had made plans for major renovation of the common areas and exterior, and in June W.I.P. had coordinated bids for renovation of the common areas. Since assuming ownership, Knight had made a few improvements to the common areas. Knight went on to testify that in early June he hired a pest control company to spray the apartments, and that he retained the company on a monthly service basis. When he received a complaint about the elevator shaft, he took care of it and hired an elevator maintenance service to make monthly checks.

In August, Knight had heard some complaints about the lack of heating and about the fact that tenant Breit did not have a heater. He had had the manager install a steam radiator in Breit's apartment in September. The central heating was not turned on at all during the summer.

Knight testified that the tenants had not paid him any rent, and that the reasonable value of the premises was that which was stated in the 30-day notices for rent increases which had been served on the tenants in May.

Jillian Reusch, a property manager for W.I.P., testified that she had received complaints from one of the tenants regarding broken windows and plumbing problems and that she had received the May 26th letter from the tenants' association.

Lawrence Young, a health officer for Los Angeles County, testified that he had inspected a few of the apartments during five visits between June 2d and August 5th. During that period Young noted seven violations which were abated upon his orders. He testified that the violations did not render the building uninhabitable (condemnable) under health department standards. That definition refers to a lack of any water, hot or cold, and to extensive sewage leakage or structurally unsound conditions.

The jury was unable to reach a verdict with respect to three tenants but returned a verdict in favor of plaintiffs against four tenants. These appeals followed, based upon defendants' claim that the trial court erroneously gave certain instructions requested by plaintiffs while refusing to give other instructions requested by defendants.

II.

First, this court must address the issue of a residential tenant who continues to live in uninhabitable premises after learning of the defects and whether this fact waives the landlord's breach of the implied warranty of habitability recognized by this court in Green v. Superior Court (1974) 10 Cal.3d 616, 111 Cal.Rptr. 704, 517 P.2d 1168.

In Green, a landlord commenced an unlawful detainer action seeking possession of leased premises and back rent. The tenant admitted nonpayment of rent but defended on the ground that the landlord had failed to maintain the premises in an habitable condition. This court held that there is in California a common law implied warranty of habitability in residential leases, and that under this warranty a landlord "covenants that premises he leases for living quarters will be maintained in a habitable state for the duration of the lease." (Id., at p. 637, 111 Cal.Rptr. 704, 517 P.2d 1168.) Further, a tenant may raise a landlord's breach of the implied warranty of habitability as a defense in an unlawful detainer proceeding. (Id., at pp. 622-629, 631-637, 111 Cal.Rptr. 704, 517 P.2d 1168.) Recognizing that at least one other court had held that such a warranty generally could not be waived by any provision in the lease or rental agreement, this court in Green stated that "public policy requires that landlords generally not be permitted to use their superior bargaining power to negate the warranty of habitability rule." (Id., at p. 625, fn. 9, 111 Cal.Rptr. 704, 517 P.2d 1168.) ² "(T)he severe shortage of low and moderate cost housing has left tenants with little bargaining power.... (E)ven 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." ³ (Id., at p. 625, 111 Cal.Rptr. 704, 517 P.2d 1168.)

The court also noted that "the increasing complexity of modern apartment buildings not only renders them much more difficult and expensive to repair ... 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." (Id., at p. 624, 111 Cal.Rptr. 704, 517 P.2d 1168.)

The declaration in Green of an implied warranty of habitability and of a public policy which generally prohibits waiver of that warranty is consistent with California's statutory pattern of landlord-tenant relations. Provisions of the Civil Code "are to be liberally construed with a view to effect its objects and to promote justice." (Civ.Code, § 4.) Further, "(a)ll contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for ... violation of law, whether willful or negligent, are against the policy of the law." (Id., § 1668.) The Legislature has declared that "(t)he 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...." (Id., § 1941.) ⁴

Section 1942 of the same code provides a remedy by which a tenant may deduct rent payments needed to cure conditions which the landlord should have corrected. This statutory remedy is available only twice in any 12-month period and is not available unless the tenant has satisfied certain procedural prerequisites. However, the Legislature has recently made clear that "(t)he remedy provided by (section 1942) is in addition to any other remedy provided by this chapter, the rental agreement, or other applicable statutory or common law." (Id., § 1942, subd. (d), added by Stats.1979, ch. 307, § 3, p. ----; see also Secretary of Housing & Urban Dev. v. Layfield (1978) 88 Cal.App.3d Supp. 28, 30, 152 Cal.Rptr. 342.)

The Legislature has further provided that "(a)ny agreement by a lessee of a dwelling...