Smolen v. Dahlmann Apartments, Ltd.

• Decision Date: 15 September 1983
• Docket Number: Docket No. 59750
• Citation: 127 Mich.App. 108,338 N.W.2d 892
• Parties: Mike SMOLEN and Peter Mikelonis, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. DAHLMANN APARTMENTS, LTD., and Green Terrace Associates, Defendants-Appellees. 127 Mich.App. 108, 338 N.W.2d 892
• Court: Court of Appeal of Michigan — District of US

Page 892

338 N.W.2d 892

Mike SMOLEN and Peter Mikelonis, on behalf of themselves and all others similarly situated Plaintiffs-Appellants, v. DAHLMANN APARTMENTS, LTD., and Green Terrace Associates Defendants-Appellees.

Docket No. 59750.

127 Mich.App. 108, 338 N.W.2d 892

Court of Appeals of Michigan.

Submitted Dec. 15, 1982.

Decided July 11, 1983.

Released for Publication Sept. 15, 1983.

[127 MICHAPP 112] Gary M. Victor, Ypsilanti, for plaintiffs-appellants.

Steven Zarnowitz, Ann Arbor, for defendants-appellees.

Before MAHER, P.J., and HOLBROOK and MARUTIAK, ^* JJ.

MAHER, Presiding Judge.

Plaintiffs appeal from the trial court's order granting the defendants' motion for summary judgment. Apparently, the motion was brought pursuant to GCR 1963, 117.2(3).

The facts are undisputed. Plaintiffs leased an apartment from defendant Green Terrace Associates in the Green Terrace Apartments complex in Ypsilanti. Defendant Dahlmann Apartments, Ltd., managed the complex. The lease required a $420 security deposit and subjected refund of the deposit to the following conditions:

"b. No damage to property beyond ordinary wear and tear resulting from careful usage.

"c. The entire apartment including range, refrigerator, bathroom, closet and cupboards have been cleaned."

Plaintiffs vacated their apartment September 10, 1979, the expiration date of the lease. Within 30 [127 MICHAPP 113] days they received a check from Green Terrace Associates for the amount of their security deposit less $37.50. They also received a damage list showing that the amount retained was charged against the security deposit to reimburse Green Terrace Associates for the expense of cleaning the apartment. Until they brought this lawsuit, the plaintiffs did not object to the retention of their deposit for this purpose.

On January 22, 1980, plaintiffs instituted this class action, alleging that the deduction of funds from their security deposit to offset the cost of cleaning their apartment violated the landlord-tenant relationship act (LTRA), M.C.L. Sec. 554.601 et seq.; M.S.A. Sec. 26.1138(1) et seq., and the Michigan Consumer Protection Act (MCPA), M.C.L. Sec. 445.901 et seq.; M.S.A. Sec. 19.418(1) et seq.

Defendants moved for summary judgment on March 17, 1980, arguing that plaintiffs' claim was barred by their failure to object to the cleaning charge in a timely fashion. On April 10, 1980, plaintiffs filed a request for admissions, seeking admissions that defendants, in the regular course of their business, made claims for cleaning expenses against the security deposits of at least 30 other tenants. Plaintiffs also moved for class certification and partial summary judgment. Subsequently, defendants tendered a certified check for $37.50, the amount deducted from the security deposit. Plaintiffs refused the tender. Defendants then filed another motion for summary judgment, contending that their tender rendered plaintiffs' claims moot and that their case was not suitable for class treatment.

Defendants' motion for summary judgment and plaintiffs' motion for partial summary judgment were argued on June 11, 1980. Plaintiffs had withdrawn[127 MICHAPP 114] their motion for class certification, having been unable to obtain discovery by the time of the hearing. At the close of the hearing, the trial court took the motions under advisement.

On August 19, 1980, the trial court rendered an opinion and order granting the defendants' motion for summary judgment. Subsequently, plaintiffs brought this appeal, raising five issues in this Court.

Plaintiffs contend that a deduction of cleaning expenses from a security deposit violates the LTRA and MCPA. Although the trial court did not rule on this question, a proper resolution of the present dispute requires us to address this issue.

We first consider whether the LTRA permits a landlord to deduct cleaning expenses from a tenants security deposit. With the LTRA, the Legislature sought to regulate the collection, use and repayment of security deposits. In particular, the act severely limits the purposes for which a landlord may retain a security deposit. The act provides:

"A security deposit may be used only for the following purposes:

"(a) Reimburse the landlord for actual damages to the rental unit or any ancillary facility that are the direct result of conduct not reasonably expected in the normal course of habitation of a dwelling.

"(b) Pay the landlord for all rent in arrearage under the rental agreement, rent due for premature termination of the rental agreement by the tenant and for utility bills not paid by the tenant." M.C.L. Sec. 554.607; M.S.A. Sec. 26.1138(7).

Consequently, a landlord may not use a tenant's security deposit for any purpose other than those listed in the statute.

[127 MICHAPP 115] The question in the present case is whether a rental unit requiring only cleaning after the termination of occupancy has suffered "damages" under the above provision. If not, then a landlord is prohibited from retaining a portion of a tenant's security deposit to pay the cost of cleaning the rental unit.

In construing a statutory provision, our primary objective is to divine the Legislature's intent. Citizens for Pre-Trial Justice v. Goldfarb, 88 Mich.App. 519, 550, 278 N.W.2d 653 (1979). Where a term is not defined by the statute, it is to be given its plain and ordinary meaning "for it is to be presumed that the Legislature, not having indicated otherwise, so intended". Bingham v. American Screw Products Co., 398 Mich. 546, 563, 248 N.W.2d 537 (1976) quoting 22 Callaghan's Michigan Civil Jurisprudence, Sec. 121, p. 479. The meaning of the term "damages" is not difficult to articulate. The ordinary meaning of "damage" is that of injury to something, in this case, property. Webster's defines "damage" as "loss or harm resulting from injury to person, property, or reputation". Webster's New Collegiate Dictionary (7th ed., 1972), p. 209. Given this meaning of the word, a rental unit requiring cleaning has not been damaged. While a grimy kitchen wall, a soiled carpet and a stained couch are all unattractive, the wall, carpet and couch themselves have not been injured. Thus the Legislature could not have intended that a rental unit needing cleaning has suffered "damages" under the statute.

We may also determine the Legislature's intent by considering the use of the term "damages" elsewhere in the LTRA. See Braden v. Spencer, 100 Mich.App. 523, 530, 299 N.W.2d 65 (1980). The statute provides that the landlord must submit to [127 MICHAPP 116] the tenant "an itemized list of damages * * * including the estimated cost of repair of each property damaged item * * * ". M.C.L. Sec. 554.609; M.S.A. Sec. 26.1138(9). (Emphasis added.) Thus, the statute contemplates that damage is the sort of condition remedied by repair.

To plaster a wall with a hole in it is to repair the wall. No one would doubt that the wall had been damaged. But to wash a wall with dirt on it is not to "repair" it. An item which is cleaned has not been repaired. Nor has that item been "damaged". Thus, the Legislature must have intended that premises requiring cleaning have not, as such, suffered damages.

This conclusion is further supported by consideration of the purpose of the LTRA. As this Court said in Stutelberg v. Practical Management Co., 70 Mich.App. 325, 338, 245 N.W.2d 737 (1976), lv. den. 398 Mich. 804 (1976):

"The Act is primarily aimed to protect the tenant from the landlord surreptitiously usurping substantial sums held to secure the performance of conditions under the lease.

* * *

"The misleading practice of landlords obtaining large security deposits while charging a lesser monthly rate than their competitors and then unilaterally withholding a good portion of this deposit for unsuspected reasons is halted by the Act."

One such "misleading practice" was to retain security deposit funds for cleaning expenses under the guise of a reimbursement for "damages". The problem has been stated as follows:

"There are those who write a lease that a deposit will be returned except for damage to the premises, wear [127 MICHAPP 117] and tear excepted. Yet we find that a dirty carpet, window, wall or cupboard is suddenly an extraordinary risk of damage and deductions from the deposit are made. The cleaning charges are usually sky high and on some occasions are either not actually borne by the landlord or are paid to subsidiary cleaning companies. These 'damage' deposits are also translated into costs of re-rental which are deducted from the deposit amount. On many occasions costs deducted are arbitrarily excessive, such as dust closet doors--$10.00; lost key--$10.00; replacement of burnt-out light bulb--$1.00 each." Memorandum of the Attorney General, Regarding: Analysis of House Bill 5978 (May 3, 1972).

We believe that the Legislature had this problem in mind when it drafted M.C.L. Sec. 554.607; M.S.A. Sec. 26.1138(7). The Legislature specified that the security deposit could only be used to pay for "actual" damages to the premises. The term "actual" was added, we believe, to alert landlords that they could no longer stretch the meaning of the term "damages" to include such fabricated "damages" as grimy appliances and dirty floors.

For the above reasons, we find that a rental unit needing only cleaning has not suffered "damages" as used in M.C.L. Sec. 554.607; M.S.A. Sec. 26.1138(7). We hold, therefore, that that provision forbids a landlord from deducting cleaning expenses from a tenant's security deposit.

We next consider whether deducting cleaning expenses from a tenant's security deposit violates the MCPA. The act prohibits certain unconscionable, deceptive or unfair acts, practices or methods in the conduct of trade or commerce. The act defines "trade or commerce" to include the rental of real property. M.C.L. Sec. 445.902; M.S.A. Sec. 19.418(2). Among other proscribed activities, the MCPA lists "[f]ailing, in a...