Three and One Co. v. Geilfuss

• Decision Date: 21 July 1993
• Docket Number: No. 92-2651,92-2651
• Parties: THREE AND ONE COMPANY, Plaintiff-Respondent-Cross-Appellant, v. Ronald F. GEILFUSS, Jr., and Annette Pietsch, Defendants-Appellants-Cross-Respondents.
• Court: Wisconsin Court of Appeals

Page 393

504 N.W.2d 393

178 Wis.2d 400

THREE AND ONE COMPANY, Plaintiff-Respondent-Cross-Appellant, v. Ronald F. GEILFUSS, Jr., and Annette Pietsch Defendants-Appellants-Cross-Respondents.

No. 92-2651.

Court of Appeals of Wisconsin.

Submitted on Briefs May 18, 1993.

Opinion Released July 21, 1993.

Opinion Filed July 21, 1993.

Before BROWN, ANDERSON and SNYDER, JJ.

ANDERSON, Judge.

Roland F. Geilfuss, Jr. and Annette Pietsch (tenants) appeal from a judgment of the trial court awarding the Three and One Company (landlord) $1234 for rent not paid and $2083.61 for waste to the leased premises for a sum of $3317.61, which was doubled under sec. 844.19(2), Stats., to $6635.22. The tenants raise five issues on appeal: (1) whether the damage to the leased premises constituted waste, (2) what is the proper measure of damages for waste, (3) whether the trial court erred in assessing late payment charges for all late rent payments during the two-year tenancy, (4) whether the trial court erred in assessing double damages after finding the tenants had committed waste, and (5) whether the trial court erred in assessing $535 in attorney's fees in the absence of evidence as to the actual attorney's fees incurred.

Three and One cross-appeals the trial court's award to the tenants, under sec. 100.20(5), Stats., of double the security deposit of $1200 and attorney's fees of $535 for Three and One's failure to comply with the requirements of Wis.Adm.Code secs. Ag 134.06(2) and 134.06(4), regarding the return of the tenants' security deposit. ¹ Three and One raises two issues on appeal: (1) whether the trial court erred in assessing depreciation against the cost of replacement in the measure of damages, and (2) whether the trial court erred in finding that Three and One withheld Geilfuss' security deposit in violation of Wis.Adm.Code sec. Ag 134.06(4).

We affirm in part and reverse in part. We hold that: (1) the trial court properly concluded that the tenants committed waste because the damages evinced unreasonable conduct, (2) the proper measure of damages is replacement cost without offset for depreciation because evidence on depreciable life was not offered, (3) late payment charges were properly assessed for all late rent payments during the two-year tenancy, and because the appellants did not raise the issue of equitable estoppel at trial they have waived their right to do so on appeal, (4) double damages are applicable to waste only and not to late rent, and (5) the trial court should have heard evidence as to the attorney's fees incurred by the tenants to effect the return of their security deposit.

FACTS

Geilfuss leased one unit of a residential duplex owned by Three and One from August 1, 1988 through July 31, 1990 pursuant to two consecutive one-year leases. The premises were also occupied by Pietsch and her three children.

Pursuant to the first one-year lease, Geilfuss paid a $1200 security deposit, which was rolled over to the second one-year lease. Both leases provided "[t]hat the Lessee shall keep the said premises in as good repair as the same are in at the commencement of said term, reasonable use and wear thereof and damage by accidental fire or other accidents, not happening through the neglect of Lessee, only excepted." Pets were prohibited with the exception of a small dog. The leases further provided for an additional $50 charge in the event the rent was not paid by the first day of the month.

The tenants kept a cat and a rabbit at the leased premises in addition to the permitted dog. At the termination of the tenancy, carpeting throughout the premises was found to be permeated with cat urine and littered with animal feces. A strong urine odor persisted despite two professional cleanings. Ultimately the carpets and six square feet of urine-rotted subflooring had to be replaced. In addition, the rear storm door, a basement light fixture and two toilet seats required replacement and the upstairs hallway incurred minor damage.

The tenants paid the rent late fifteen times during their two-year tenancy, including July 1990, for which they failed to pay any rent. On only three occasions did they pay the $50 late charge.

The trial court held that the tenants committed waste to the unit by damaging the carpeting and subflooring, basement light fixture, rear storm door, two toilet seats and upstairs hallway. The trial court awarded replacement cost less depreciation for the carpeting ($2595 - $865 or $1730), and rear storm door ($160 - $64 or $96). The trial court awarded full cost for the basement light fixture ($19.95), two toilet seats ($29.90), carpet cleaning ($198.76) and upstairs hallway ($9). When the court doubled the damages for waste pursuant to sec. 844.19(2), Stats., it included damages for late and unpaid rent.

With respect to rent payments, the trial court found that the tenants were liable for all unpaid late payment charges incurred during their two-year tenancy and unpaid rent, for a total of $1234.

Finally, the trial court awarded the tenants double their security deposit of $1200 and attorney's fees of $535 pursuant to sec. 100.20(5), Stats., for the landlord's failure to comply with Wis.Adm.Code sec. Ag 134.06(4), regarding withheld security deposits.

The trial court offset these awards and found that the landlord was entitled to recover a net sum of $3700.32 plus attorney's fees, costs and disbursements permitted by sec. 100.20(5).

WASTE BY TENANTS

The first issue we address is whether or not the tenants committed waste. The existence of waste is a question of fact. Pleasure Time, Inc. v. Kuss, 78 Wis.2d 373, 382, 254 N.W.2d 463, 468 (1977). Findings of fact in a trial to the court are affirmed unless clearly erroneous. Section 805.17(2), Stats.

Waste is defined as "the unreasonable conduct by the owner of a possessory estate that results in physical damage to the real estate and substantial diminution in the value of the estates in which others have an interest." Pleasure Time, 78 Wis.2d at 381, 254 N.W.2d at 467. Whether a particular act is waste depends on the circumstances. Id. Waste may be active (i.e., intentional or voluntary) or passive (the result of negligence or the failure to act). See Prudential Ins. Co. v. Spencer's Kenosha Bowl, Inc., 137 Wis.2d 313, 320-21, 404 N.W.2d 109, 113 (1987).

The tenants argue that they did not intentionally permit their pets to use the carpet for urination and defecation. However, unreasonable conduct, not intent, is the standard for waste. See Pleasure Time, 78 Wis.2d at 381, 254 N.W.2d at 467. The urine-rotted subflooring indicates a habitual problem. The tenants, by allowing their pets to use the unit as a litter box, acted unreasonably. The tenants do not contest the finding of waste as to any of the other damages. Based on these facts, the trial court's finding that the tenants committed waste is not clearly erroneous; therefore, we affirm.

DAMAGES FOR WASTE

Next we turn to the proper measure of damages for waste. Section 704.07(3), Stats., ² requires the tenant to repair damage done to the premises or, failing that, to reimburse the landlord for the reasonable cost of repairs. Where an injury to property is easily repairable and the cost of restoration is readily ascertainable, the cost of repair is the preferred method of calculating damages. Laska v. Steinpreis, 69 Wis.2d 307, 313, 231 N.W.2d 196, 200 (1975). However, if dissatisfied with the cost of repairs, the tenant may introduce evidence that diminution of value is the lesser, and therefore correct, measure of damages. See id. at 314, 231 N.W.2d at 200.

The tenants contend that damages should be based on the cost of the old carpet rather than the new carpet. We disagree. The proper measure of damages is the cost of replacement at the time the harm was caused, not when the original carpet was purchased. See Zindell v. Central Mut. Ins. Co., 222 Wis. 575, 583, 269 N.W. 327, 330-31 (1936).

The landlord argues that the proper measure of damages for the carpeting and rear storm door is the full replacement cost because the tenants did not offer evidence regarding the depreciable lives of these assets. The determination of damages is within the discretion of the trial court. Whether the trial court applied a proper legal standard in determining damages is a question of law which we review de novo. Jauquet Lumber Co. v. Kolbe & Kolbe Millwork Co., 164 Wis.2d 689, 703, 476 N.W.2d 305, 310 (Ct.App.1991). Findings of fact made by the trial court with regard to damages will not be upset by us unless clearly erroneous. Id. The tenants did not offer evidence on depreciable life, and we hold that such evidence is outside the field of general knowledge. In such cases the findings of the trial court must be based upon testimony of witnesses or other evidence made a part of the record. See Will of Gudde, 260 Wis. 79, 85, 49 N.W.2d 906, 909 (1951). Therefore, the trial court's sua sponte reduction of the replacement cost of the carpeting and storm door for depreciation is clearly erroneous. We reverse the trial court and find the measure of damages to be the cost of the new carpeting ($2595) and storm door ($160) without offset for depreciation.

FEES FOR LATE RENT PAYMENTS

The tenants contest the trial court's finding that they owed late rent payment charges. Over the course of their two-year tenancy, the tenants paid the rent late fifteen times, including July 1990 for which they failed to pay any rent. Of these fifteen instances, the tenants actually paid the additional $50 charge for late payment only three times.

The tenants argue that because the landlord did not demand payment of these late payment charges until after the tenants demanded their security deposit, the landlord is equitably estopped from demanding late payment fees. The tenants did not, however, raise the issue of equitable estoppel at trial. Generally, issues not raised or considered by the trial...