Miller v. C.W. Myers Trading Post, Inc.

• Decision Date: 05 May 1987
• Docket Number: No. 8621DC1059,8621DC1059
• Citation: 355 S.E.2d 189,85 N.C.App. 362
• Parties: Richard MILLER and his wife, Brenda Miller v. C.W. MYERS TRADING POST, INC.
• Court: North Carolina Court of Appeals

Page 189

355 S.E.2d 189

85 N.C.App. 362

Richard MILLER and his wife, Brenda Miller v. C.W. MYERS TRADING POST, INC.

No. 8621DC1059.

Court of Appeals of North Carolina.

May 5, 1987.

John T. Newman, Winston-Salem, for plaintiffs-appellants.

Molitoris & Connolly by Anne Connolly and Theodore M. Molitoris, Winston-Salem, for defendant-appellee.

BECTON, Judge.

Plaintiffs, Richard and Brenda Miller, instituted this action on 17 May 1985 against defendant, C.W. Myers Trading Post, Inc., seeking a retroactive rent abatement for defendant's alleged violations of the Residential Rental Agreements Act. The alleged violations included failure to comply with the Housing Code of the City of Winston-Salem, failure to make repairs necessary to put and keep the rented premises in a fit and habitable condition, and failure to maintain in a good and safe working order and promptly repair all electrical, plumbing, sanitary and other facilities supplied by defendant as required by N.C.Gen.Stat. Sec. 42-42(a)(1), (2) and (4) (1984). Plaintiffs also sought to recover punitive damages, alleging that the number of Housing Code violations and defendant's prolonged failure to make repairs after notice from the City of Winston Salem and from plaintiffs "evidences a reckless and wanton disregard of the plaintiffs' rights to live in a dwelling fit for human habitation." Defendants answered, denying the material allegations of the Complaint, setting forth several defenses, including the statute of limitations, and counterclaiming for court costs and attorney's fees based on allegations that plaintiffs instituted the action in retaliation for defendant's efforts to sell the house rented by them.

Defendant moved for summary judgment and submitted depositions of both plaintiffs in support of the motion. Plaintiffs filed no additional materials in opposition but relied upon the allegations in their verified Complaint. On 5 May 1986, the trial court entered summary judgment for defendant, dismissing the action on the grounds that there was no genuine issue of material fact. From that judgment, plaintiffs appeal. We reverse as to the claim for a retroactive rent abatement but affirm the judgment against plaintiffs on their claim for punitive damages.

I

The pleadings and depositions considered in the light most favorable to plaintiffs tend to show the following. Beginning in August of 1978, plaintiffs rented and occupied, as tenants of defendant, a house located at 410 Peden Street, Winston-Salem, for $175 per month. From the beginning of their tenancy, the premises were defective in numerous respects, including leaking gutters, rotten porches, torn and fallen screens, loose steps, leaking plumbing, falling plaster, peeling paint, rotten kitchen cabinets, electrical problems, and a malodorous "cess pool" in the yard. Defendant represented to Mrs. Miller that the premises would be repaired once they were rented. However, despite repeated written requests by plaintiffs, defendant failed to make repairs. On one or more occasions, Mrs. Miller called the city inspector. In May 1984, the Community Development Department found the premises unfit for human habitation due to substandard conditions and violations of the City Housing Code. Some of the deficiencies were corrected in July and November of 1984 and January of 1985, while others remained uncorrected as of 17 May 1985, when this action was filed. As of 22 November 1985, when plaintiffs' depositions were taken, most problems were corrected except a hole under the kitchen sink cabinet, falling plaster in one bedroom, two cracked windows, and the unpleasant smell from the yard.

II

The sole issue on appeal is whether the trial court erred in granting defendant's motion for summary judgment.

A

Summary judgment is appropriate only when the materials before the court show that there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law. N.C.Gen.Stat. Sec. 1A-1, Rule 56 (1983); Kent v. Humphries, 303 N.C. 675, 281 S.E.2d 43 (1981). The burden of establishing the lack of any triable issue of fact is on the party moving for summary judgment, and that party's papers are carefully scrutinized while those of the opposing party are regarded with indulgence. Stroup Sheet Metal Works, Inc. v. Heritage, Inc., 43 N.C.App. 27, 258 S.E.2d 77 (1979). Movant's burden may be met by proving the non-existence of an essential element of plaintiff's claim for relief, Southerland v. Kapp, 59 N.C.App. 94, 295 S.E.2d 602 (1982), or by establishing a complete defense to plaintiff's claim, Estrada v. Jaques, 70 N.C.App. 627, 321 S.E.2d 240 (1984). Summary judgment is also appropriate whenever the pleadings or proof disclose that no cause of action exists. Williams v. Congdon, 43 N.C.App. 53, 257 S.E.2d 677 (1979).

The record fails to disclose the specific grounds upon which summary judgment was deemed appropriate by the trial court. Therefore we briefly discuss a number of grounds suggested by the pleadings and the briefs.

B

We first address the propriety of the judgment as to plaintiffs' claim for a retroactive rent abatement.

Although the parties have not expressly raised the issue, we deem it important to consider initially the appropriateness of the theory upon which the plaintiffs have based their claim for relief since defendant's Answer includes a motion to dismiss pursuant to Rule 12(b)(6) for failure to state a claim, and since summary judgment would be proper if no legally cognizable cause of action exists. Historically, North Carolina adhered to the common law rule of caveat emptor in the landlord-tenant context. Landlords had no duty to repair or maintain structures, Brooks v. Francis, 57 N.C.App. 556, 291 S.E.2d 889 (1982), and the law implied no warranty as to the quality or condition of leased premises. See Gaither v. Hascall-Richards Steam Generator Co., 121 N.C. 384, 28 S.E. 546 (1897); Robinson v. Thomas, 244 N.C. 732, 94 S.E.2d 911 (1956); see generally Fillette, North Carolina's Residential Rental Agreements Act: New Developments for Contract and Tort Liability in Landlord-Tenant Relations, 56 N.C.L.Rev. 785 (1978). Even when a landlord made express promises to repair, such covenants were considered independent of the tenant's covenant to pay rent. Id. at 786.

By the enactment in 1977 of the Residential Rental Agreements Act, N.C.Gen.Stat. Secs. 42-38 et seq., our legislature implicitly adopted the rule, now followed in most jurisdictions, that a landlord impliedly warrants to the tenant that rented or leased residential premises are fit for human habitation. The implied warranty of habitability is co-extensive with the provisions of the Act. Jackson v. Housing Authority of High Point, 73 N.C.App. 363, 326 S.E.2d 295, disc. review denied, 313 N.C. 603, 330 S.E.2d 610 (1985), aff'd, 316 N.C. 259, 341 S.E.2d 523 (1986). Section 42-42 of the Act provides in pertinent part:

(a) The landlord shall:

(1) Comply with the current applicable building and housing codes, whether enacted before or after October 1, 1977, to the extent required by the operation of such codes; no new requirement is imposed by this subdivision (a)(1) if a structure is exempt from a current building code;

(2) Make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition;

(3) Keep all common areas of the premises in safe condition; and

(4) Maintain in good and safe working order and promptly repair all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities and appliances supplied or required to be supplied by him provided that notification of needed repairs is made to the landlord in writing by the tenant except in emergency situations.

The statute does not make clear what remedies are available for breach of these provisions. (For a thorough discussion of possible remedies and defenses available under the Act, see generally Fillette, 56 N.C.L.Rev. 785.) The only existing appellate decisions involving violation of the Act deal with tort actions for personal injury or wrongful death in which a landlord's failure to comply with the statute was considered evidence of negligence. See Jackson; Brooks v. Francis, O'Neal v. Kellett, 55 N.C.App. 225, 284 S.E.2d 707 (1981).

This then, is a case of first impression in that we must consider what remedies are available apart from a tort action. We limit our consideration solely to the appropriateness of the rent abatement remedy sought by plaintiffs.

In a pre-Act case, Thompson v. Shoemaker, 7 N.C.App. 687, 173 S.E.2d 627 (1970), this Court held that a tenant could not recover rent payments on the theory that the rented dwelling was maintained by the landlord in violation of the city housing code and was unfit for human habitation, when the tenant had voluntarily continued to pay rent and to occupy the premises with knowledge of the violations. Leading decisions from other jurisdictions have held that recognition of an implied warranty of habitability makes available to tenants the basic common law contract remedies of damages, reformation, and rescission. See, e.g., Teller v. McCoy, 162 W.Va. 367, 253 S.E.2d 114 (1978); Berzito v. Gambino, 63 N.J. 460, 308 A.2d 17 (1973); King v. Moorehead, 495 S.W.2d 65 (Mo.App.1973); Mease v. Fox, 200 N.W.2d 791 (Iowa 1972). A number of courts have expressly recognized, among other remedies, an affirmative cause of action for recoupment of all or part of rents paid, which is available even to a tenant who does not abandon the premises. See, e.g., Hilder v. St. Peter, 144 Vt. 150, 478 A.2d 202 (1984); Teller v. McCoy; Berzito v. Gambino; Kline v. Burns, 111 N.H. 87, 276 A.2d 248 (1971).

G.S. Sec. 42-41 states that the tenant's obligation to pay rent and the landlord's obligation to comply with Section 42-42(a) are "mutually dependent," while Section 42-44(a) provides that "[a]ny right or obligation declared by...