Lowe v. Root

Decision Date06 February 1975
Docket NumberNo. 12817,12817
Citation166 Mont. 150,32 St.Rep. 122,531 P.2d 674
PartiesEmma LOWE, Plaintiff and Appellant, v. Fred C. ROOT et al., Defendants and Respondents.
CourtMontana Supreme Court

Richard J. Conklin (argued), White Sulphur Spring, for plaintiff and appellant.

Garlington, Lohn & Robinson, Sherman V. Lohn (argued), Gary L. Graham (argued), Missoula, for defendants and respondents.

CASTLES, Justice.

This is an appeal by the lessee, Emma Lowe, from a summary judgment of the district court, Missoula County, granted in favor of lessors, Fred C. Root, Carl E. Dragstedt, Evelyn Dragstedt, Ella R. Clausen, Elmer S. Dragstedt and Elinor R. Dragstedt.

On April 9, 1970, Emma Lowe entered into two nearly identical leases with the lessors, each involving an undivided one half interest in the same real property described as the Belmont Hotel in the city of Missoula. One lease identified Fred Root as the lessor, the other identified the Dragstedts and Ella Clausen as lessors.

Each lease provided that the term of the lease should run up to and including March 31, 1974. The lessor expressly covenanted for the lessee the quiet enjoyment of said term. Lessee agreed to:

'* * * care for and maintain the interior of said premises and the exterior casings of all windows located on said premises; to permit no unlawful use of said premises; to make no major alterations without permission of the lessor; to maintain and repair the heating plant and hot water heater, * * * and to carry adequate insurance to protect the lower floor tenants from any water damage.'

The lessors, for their part, were:

'* * * to keep and maintain the exterior walls of said premises and the roof, and to be responsible for the care and repair of said roof * * *.'

All parties expressly understood and agreed that they had examined the premises and knew the condition thereof.

While in possession of the premises lessee Emma Lowe received a letter from the fire marshal, dated January 23, 1973, outlining a number of violations of the Life Safety and Electrical Codes of the city of Missoula and state of Montana. With the sole exception of deficiences with respect to the fire escape, all deficiencies enumerated in the letter involved the interior portion of the building. The letter referred to a letter dated December 23, 1970 which listed many of the same deficiencies. Emma Lowe admitted receiving this 1970 letter. The January 1973 letter ordered the violations to be corrected by August 1, 1973.

Lessor Root contacted the county attorney and requested him to initiate an action to condemn the premises from further use as a hotel, boarding house or rooming house. On May 14, 1973, an order of ocndemnation was filed in the district court declaring the premises to be a fire hazard and a public nuisance and ordering all parties to this instant action to alter and repair the building on or before August 1, 1973. On August 3, 1973, the district court granted summary judgment, affirming the order of condemnation and directing the state fire marshal to proceed with its enforcement.

On June 19, 1973, Lowe filed a complaint in district court against Fred Root seeking lost profits for the remainder of the lease term and renewal term. The pertinent grounds of the complaint were: The premises were unfit for the purpose for which they were rented. Defendant Root had failed to maintain the premises in a good and proper fashion so that they could be operated for the purpose for which the lease was intended. Plaintiff Lowe had demanded that defendant Root perform according to the terms of the contract to restore the premises to a good and proper condition for the purpose for which they were rented and that defendant refused. Emma Lowe had been caused to become the defendant in the condemnation action bacause of the failure of defendant to repair.

In Count VIII of her complaint Lowe alleged in the following garbled fashion:

'* * * That they (the defendants) fraudulently concealed information concerning the defects on the premises, from the plaintiff and fraudulently withheld the same information, which was known to them concerning the defective condition of the premises and that said defects were concealed unobservable by a common examination of the premises, and that the plaintiff, in reliance on the assurance of the defendants that the premises were, in fact, in fit and proper order, basis for the performing of the business of a hotel rental as they had been leases for, entered into the agreement.'

Count IX of the complaint alleged:

'That the defendant has wilfully, wrongfully, unlawfully, and intentionally attempted to drive the plaintiff from the full and quiet enjoyment of the premises, under the lease. That the defendant, Fred C. Root, is the City Attorney of the City of Missoula, and was privity to knowledge concerning the defects above alleged in the premises. * * * That said defendant, Fred C. Root, has acted willfully, maliciously, and wrongfully in an attempt to vex, harass, annoy and intimidate the plaintiff * * *. The defendant has, as an agent for the * * * (Dragstedts and Clausen) and for himself used the position of his office to exert, through the County Attorney's Office, caused to be filed a complaint alleging that the plaintiff is guilty of allowing the premises to fall into decay, and further the defendant has, at his specific request and intent, caused the County through the County Attorney's office, to issue an Order declaring the premises a fire hazard and attempting to abate the same'.

Three days later Lowe filed a nearly identical complaint against the remaining defendants. The only substantial difference in this second complaint was she alleged that Root acted as the agent of the other defendants.

Subsequent to the condemnation, Lowe vacated the premises and no further rentals were paid.

The two actions heretofore mentioned, plus an unlawful detainer action filed by defendants against plaintiff Lowe were consolidated. Defendants moved for summary judgment. In its judgment and order granting defendants' motion, the district court held that under the terms of the leases defendants were not obligated to make the substantial changes and alterations required; that section 42-202, R.C.M.1947, limits recourse by a tenant to vacating the premises or performing repairs up to the amount of one month's rental where, as here, the leased premises are for human habitation; that punitive damages cannot be awarded without a showing of actual damages; and, that plaintiff inspected the leased premises and knew its condition. Plaintiff Lowe appeals from the district court's granting of defendants' motion for summary judgment.

Three issues are presented for consideration on appeal:

(1) Was the district court correct in granting summary judgment to the defendants on the issue of fraud?

(2) Was the district court correct in its determination that sections 42-201 and 42-202, R.C.M.1947, constitute a bar to the claim of plaintiff?

(3) Was the district court correct in its determination that plaintiff's complaint did not present a factual question of wrongful disruption of possession?

We answer all questions in the affirmative.

As to the issue of fraud, the previously quoted Count VIII of the complaint alleged fraudulent concealment of certain information as to defects in the property prior to the leases.

Although appellant appears to have abandoned any argument that she was defrauded as to the physical condition of the premises, we shall discuss that issue in order to show that summary judgment in favor of respondents was proper with respect to that level of fraud. In support of her misrepresentation argument, appellant cites Lee v. Stockmen's National Bank, 63 Mont. 262, 284, 207 P. 623, 630. Lee sets forth the elements necessary to prove actual fraud. It goes further, however, and states:

"When it appears that a party, who claims to have been deceived to his prejudice his investigated for himself, or that the means were at hand to ascertain the truth * * * of any representations made to him, his reliance upon such representations, however false they may have been, affords no ground of complaint.' (Grinrod v. Anglo-American Bond Co., 34 Mont. 169, 85 P. 891; Power & Bros. v. Turner, 37 Mont. 521, 97 P. 950; 26 C.J. 1149.)' (Emphasis supplied).

In other words, if appellant's inspection of the premises revealed or would have revealed the true physical condition of the premises, she would have no right to rely upon any concealment by respondents with respect to the physical condition of the premises.

Both leases provide that the parties 'agree that they have examined the premises and know the condition thereof'. Appellant admits she inspected the premises. A review of the deficiencies as cited in the order of condemnation, reveals that all of the alleged defects were open and notorious. A superficial inspection of the building would reveal those deficiencies. Applying the facts of this case to Lee, and particularly to the language quoted heretofore, necessitates a finding that an actionable case of fraud as to the physical condition of the premises could not be found under the circumstances.

The claimed misrepresentation was not argued by appellant Lowe in the trial court, except in what may be described as an oblique manner. The rather garbled allegation in Count VIII of the complaint did not, by itself, allege fraud as to legal consequences flowing from the physical condition of the premises.

Following the granting of summary judgment, appellant filed what she called a motion for rehearing. For the first time, not in the motion, but in the brief filed with the motion, appellant Lowe rather obliquely states that:

'* * * the premises were not in fact, fit for the purpose of leasing the same as a hotel and that the knowledge that the premises were not fit for the purpose for which they were leased was a special and peculiar...

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