State v. Schwab
| Decision Date | 11 January 1985 |
| Docket Number | No. 50756-2,50756-2 |
| Citation | 103 Wn.2d 542,693 P.2d 108 |
| Parties | STATE of Washington, Respondent, v. Anthony SCHWAB and Jane Doe Schwab, Appellants. |
| Court | Washington Supreme Court |
Ken Eikenberry, Atty. Gen., Betsy Hollingsworth, Asst. Atty. Gen., John R. Ellis, Deputy Atty. Gen., Jon P. Ferguson, Asst. Atty. Gen., Seattle, for respondent.
At issue in this case is whether violations of the Residential Landlord-Tenant Act of 1973 come under the Consumer Protection Act.
This case of first impression was certified to this court by the State of Washington Court of Appeals, Division I, at the request of the Attorney General. In making such request the Attorney General's office represented that it was "important that the Attorney General establish whether Residential Landlord-Tenant Act violations indeed violate the Consumer Protection Act" and that "because of the significant impact that a ruling on any issue adverse to the state would have, it is probable that legislative changes would need to be sought."
The defendants in this case are Anthony Schwab and his wife. For convenience, we will refer to Mr. Schwab as though he were the sole defendant. He bought a number of submarginal Seattle residential housing units at tax and lien foreclosure sales and thereafter rented them, usually for less than $150 per month. This litigation primarily concerns four of those units.
The defendant's management philosophy, as found by the trial court, was this: 1 The defendant's business practices were somewhat informal, at best. For example, the rental agreements were handwritten, and the tenant in one of his units here involved paid no rent at all for the 3 1/2 years of his tenancy prior to the trial.
Two of the tenants complained to the Consumer and Business Fair Practices Division of the State Attorney General's Office. Following an investigation, that office filed a Complaint for Injunctive and Additional Relief under the Consumer Protection Act in the Superior Court of the State of Washington for King County.
Following a 4-day trial to the court, the court found as facts that the defendant had violated sections of the City of Seattle Housing Code, Seattle Municipal Code 22.200, and of the Residential Landlord-Tenant Act of 1973, RCW 59.18. At this point it should be observed parenthetically that the city housing code violations are, by reference in the landlord-tenant act, RCW 59.18.060(1), made violations of the landlord-tenant act and they are so considered herein. The trial court concluded that the defendant's acts were violations of the landlord-tenant act and of the Consumer Protection Act, RCW 19.86.020.
Acting pursuant to provisions of the Consumer Protection Act, the trial court awarded restitution in the sum of $125 to a tenant found to have made a security deposit that had not been returned and awarded judgment to the State against the defendant for $8,800 in civil penalties and $25,000 in attorneys' fees. Thus, the total judgment against the defendant was $33,925 plus costs. The defendant was also enjoined from further similar acts. In argument before this court the defendant states that he has since sold the houses involved.
The defendant appeals; the State cross appeals alleging that the trial court abused its discretion in not awarding an additional $20,158.05 in attorneys' fees.
One question is dispositive of the various issues raised by the appeal and cross appeal.
Are residential tenancies subject to the provisions of the Consumer Protection Act?
CONCLUSION. Residential landlord-tenant problems are within the express purview of the Residential Landlord-Tenant Act of 1973, RCW 59.18, and we perceive the legislature's intent to clearly be that violations of that act do not also constitute violations of the Consumer Protection Act, RCW 19.86. We reverse the trial court.
In the interest of readability, the citations in this opinion have been placed in the margin wherever feasible.
The Consumer Protection Act, RCW 19.86, declares unlawful "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce". RCW 19.86.020. The authority of the Attorney General to proceed under the act is found in the following section thereof:
The attorney general may bring an action in the name of the state against any person to restrain and prevent the doing of any act herein prohibited or declared to be unlawful; and the prevailing party may, in the discretion of the court, recover the costs of said action including a reasonable attorney's fee.
The court may make such additional orders or judgments as may be necessary to restore to any person in interest any moneys or property, real or personal, which may have been acquired by means of any act herein prohibited or declared to be unlawful.
RCW 19.86.080.
As this court held in the leading 1972 Consumer Protection Act case of State v. Reader's Digest Ass'n, 81 Wash.2d 259, 275, 501 P.2d 290 (1972), appeal dismissed, 411 U.S. 945, 93 S.Ct. 1927, 36 L.Ed.2d 406 (1973):
In the final analysis, the interpretation of RCW 19.86.020 is left to the state courts. This enables us to arrive at the statute's meaning by the same "gradual process of judicial inclusion and exclusion" used by the federal courts ... But in each case the question of what constitutes an "unfair method of competition" or an "unfair or deceptive act or practice" under RCW 19.86.020 is for us, rather than the federal courts, to determine.
In the more than a decade since that decision, this court and the other courts of this state have been engaged in that "gradual process of judicial inclusion and exclusion". Since prevailing claimants in Consumer Protection Act cases are entitled to recover, in addition to actual damages, reasonable attorneys' fees and in some cases treble damages, 2 there has been no dearth of litigation under the act.
The Legislature, which adopted the Consumer Protection Act in the first instance, has further facilitated this inclusion and exclusion process. It has done so by responding from time to time to problems in the market place by including certain designated activities within the ambit of the act. The Legislature has, for example, specifically placed within the scope of the Consumer Protection Act such widely diverse activities as charitable solicitations, 3 chain distributor schemes, 4 usurious contracts, 5 camping clubs, 6 unfair motor vehicle business practices, 7 discriminatory practices, 8 consumer leases, 9 time share activities, 10 land development, 11 debt adjusting, 12 hearing aid sales, 13 embalming and funeral directing businesses 14 and telephone equipment sales. 15
As will be looked at shortly, the Legislature has also considered, but rejected, the inclusion of other activities within the act.
By inclusion of the foregoing activities within the act, not only is the Attorney General's Office authorized to act in such matters, as it has in this case, 16 but private litigants are likewise empowered to utilize the remedies provided them by the act. 17
There is a marked difference between the judicial and legislative processes of inclusion and exclusion of activities under the Consumer Protection Act. In the legislative process, the people engaged in the activity sought to be specifically included within the act have the full opportunity to be heard and to have their particular problems considered at legislative hearings. Furthermore, the merits of any such proposed inclusion are subject to debate and amendment in legislative committees and on the floor of the respective houses of the Legislature.
The judicial process, on the other hand, does not always provide equivalent opportunities. In the present case, for example, the State Attorney General's Office represents the interests of the public (and indirectly the rights of the individual tenants), 18 whereas the landlord appearing pro se represents himself in a case which potentially affects every person in the state who rents out or ever will rent out one or more dwelling units. Although the Legislature has mandated that the , RCW 19.86.920, that is not to say that the judiciary should not give the most careful consideration to the "process of judicial inclusion and exclusion" of activities under the act.
The Attorney General in this case, as suggested by some commentators in the past, urges this Court to hold that the Consumer Protection Act, RCW 19.86, is available as a vehicle for enforcing tenants' rights as those rights are established by the Residential Landlord-Tenant Act of 1973, RCW 59.18. 19 One recurring argument, as expressed in the Attorney General's brief herein, is that "violations of statutes promulgated in the public interest constitute per se violations, thus creating in the state a power of enforcement in order that the beneficial purposes of the statutes are carried out." 20 Since all statutes are presumably promulgated by the Legislature in the public interest, this is tantamount to arguing that any violation of a statute is a per se violation of the public interest and that a Consumer Protection Act action can be brought thereon by either the attorney general 21 or a private party. 22 This court rejected that precise argument in Haner v. Quincy Farm Chems. Inc., 97 Wash.2d 753, 761-63, 649 P.2d 828 (1982). As succinctly put in Sato v. Century 21 Ocean Shores Real Estate, 101 Wash.2d 599, 601, 681 P.2d 242 (1984), "not every violation of a statute results in a per se consumer...
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