Shill v. Careage Corp.

• Decision Date: 22 August 1984
• Docket Number: No. 83-1206,83-1206
• Citation: 353 N.W.2d 416
• Parties: Beverly SHILL and Allan Shill, Appellees, v. The CAREAGE CORPORATION and Safecare Company, Inc., Associated Together and in a Joint Venture Known as Safecare--Careage Venture 12, Appellants, and Continental Care Centers of Council Bluffs, Inc., Defendant.
• Court: Iowa Supreme Court

Page 416

353 N.W.2d 416

Beverly SHILL and Allan Shill, Appellees, v. The CAREAGE CORPORATION and Safecare Company, Inc., Associated Together and in a Joint Venture Known as Safecare--Careage Venture 12, Appellants, and Continental Care Centers of Council Bluffs, Inc., Defendant.

No. 83-1206.

Supreme Court of Iowa.

Aug. 22, 1984.

John M. French of Stuart, Tinley, Peters, Thorn, Smits & Sens, Council Bluffs, for appellants.

Peter J. Peters, Council Bluffs, for appellees.

Considered by McCORMICK, P.J., and McGIVERIN, LARSON, SCHULTZ and WOLLE, JJ.

SCHULTZ, Justice.

Defendant landlord ¹ appeals from a negligence action tried to the court in which an employee of its tenant recovered damages from the landlord for injuries sustained in a fall on the leased premises. The employee's husband was also awarded damages for loss of consortium. On appeal, the landlord claims the trial court erred by holding that a failure to record a lease pursuant to Iowa Code section 558.41 left the landlord in control of the premises as a matter of law. While the plaintiffs support this ruling by the trial court, in event of error they advocate two alternative theories of recovery. First, they suggest the warranty of habitability implied in residential leases should be extended to commercial leases. Second, they urge us to no longer require control of the premises by a landlord as a prerequisite of tort liability for injuries caused by the unsafe condition of the premises. The landlord answers these contentions by pointing out that these two theories of liability are being raised for the first time on appeal and thus should not be considered. We hold that a failure to record a leasehold interest does not affect the factual determination concerning control of the premises and that we will not consider plaintiffs' alternate theories since they were raised for the first time on appeal.

Beverly Shill, a registered nurse, was employed at a nursing home in Council Bluffs known as the Council Bluffs Care Center. On March 4, 1980, while on her way to work, Shill was injured when she slipped on a patch of ice near the back entrance of the nursing home. She filed a claim for workers' compensation benefits and subsequently entered a special case settlement with her employer. Although the settlement agreement was signed by Council Bluffs Care Center, a division of Continental Care Corporation, evidence at trial revealed that this designation was an unrecorded trade name used by the operator/lessee of the nursing home, Continental Care Centers of Fullerton, Inc. Some time after this settlement, Shill instituted a negligence action against the record titleholders of the real estate, The Careage Corporation and Safecare Company, Inc., Associated Together in a Joint Venture as Safecare-Careage Venture 12 ² (landlord) and the alleged operator of the Council Bluffs Care Center, Continental Care Centers of Council Bluffs, Inc. ³ Shill's husband, Allan, joined her action claiming damages for loss of consortium as a result of the injuries his wife sustained.

Continental Care Centers of Council Bluffs, Inc., denied plaintiffs' allegations that it operated the nursing home and moved for a dismissal at the end of plaintiffs' case and again at the close of all the evidence. The trial court concluded that the Shills had offered no evidence as to the relationship, if any, between Council Bluffs Care Center and Continental Care Centers of Council Bluffs, Inc. It alluded to the defendant's evidence that the Council Bluffs Care Center is an unrecorded trade name of Continental Care Centers of Fullerton, Inc., and held that under the record made, it was compelled to dismiss the claim against Continental Care Centers of Council Bluffs, Inc. No appeal was taken from that ruling.

The trial court did hold the landlord liable and awarded damages to Beverly and her husband Allan. In doing so, the court found the roof of an overhang on the nursing home did not have a drainage downspout to handle water draining off the roof and that the patch of ice was created by snow that had melted during the previous day and frozen overnight on the parking lot. It determined the landlord was in control of the premises and under a duty of care to properly maintain the premises. It found this duty was breached by its failing to install guttering at the edge of the overhang, failing to adequately light the area, and failing to salt or sand the parking lot.

I. Effect of an unrecorded lease. The landlord asserts that a failure to record a leasehold interest and any subsequent assignments does not, as a matter of law, place control of the rented premises in the landlord. We must agree.

The facts concerning control of the premises are undisputed. A deed conveying the property to the landlord was executed and recorded in April of 1970. A lease of the premises dated October 28, 1970, between the landlord and a lessee was placed into evidence. This initial lease was never recorded. Several subsequent assignments of that lease, which contained references to the original lease, were placed of record in the county recorder's office, although the last assignment to the present lessee, Continental Care Centers of Fullerton, Inc., was not recorded. The lease contained a provision that the lessee was responsible for the condition and repair of the premises and that all improvements and repairs were to be made at lessee's expense. The lease also specifically provided that the lessee would remove snow and ice from all walkways and stairs leading to and from the premises. The only evidence as to acts of physical control of the premises showed the lessee rather than the landlord performed all repairs and maintenance.

The trial court ignored the factual evidence that Shill's employer, the lessee, had control over property and was responsible for maintenance and repairs and instead held the landlord had control of the premises. In doing so, the court relied on a recording statute which provides: "No instrument affecting real estate is of any validity against subsequent purchasers, without notice, unless filed in the office of the recorder of the county in which the same lies, as hereinafter provided." Iowa Code § 558.41. The court found as a matter of law there was a correlation between the recording statutes and the rights of an injured party and went on to state that "[t]he failure to record the lease in this case leaves the landlord in control of the property." Having concluded the landlord retained control over the premises, the court then invoked the rule that an employee of a tenant is not precluded from recovering damages from a landlord for injuries negligently caused on that part of the premises under the landlord's control. While we have no quarrel with this latter rule, we do hold the trial court misinterpreted the consequence of the recording statute.

The protection of the recording statute extends to individuals or entities claiming a right, title or interest in the property. By its terms, this statute only purports to protect "subsequent purchasers for valuable consideration, without notice." Iowa Code § 558.41. The purpose of the recording act is "to notify subsequent purchasers and incumbrancers of the rights [the recorded] instruments are intended to secure." Connolly v. Des Moines & Central Iowa Railway, 246 Iowa 874, 890, 68 N.W.2d 320, 330 (1955) citing Pels v. Stevens, 187 Iowa 443, 462, 173 N.W. 56, 63 (1917). See also 51C C.J.S. Landlord and Tenant § 220 (1968). As such, the statute has no correlation to the...