Wade v. Jobe, No. 890443

• Court: Utah Supreme Court
• Writing for the Court: DURHAM; ZIMMERMAN; HOWE; HALL, C.J., and STEWART
• Citation: 818 P.2d 1006
• Parties: Clyde WADE, Plaintiff and Appellee, v. Lynda JOBE, Defendant and Appellant.
• Decision Date: 23 September 1991
• Docket Number: No. 890443

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818 P.2d 1006 Clyde WADE, Plaintiff and Appellee,
v.
Lynda JOBE, Defendant and Appellant. No. 890443. Supreme Court of Utah. Sept. 23, 1991.

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Judith Mayorga, Ogden, Bruce M. Plenk, Salt Lake City, for defendant and appellant.

James H. Deans, Salt Lake City, for plaintiff and appellee.

DURHAM, Justice:

In June 1988, defendant Lynda Jobe (the tenant) rented a house in Ogden, Utah, from plaintiff Clyde Wade (the landlord). Jobe had three young children. Shortly after she took occupancy, the tenant discovered numerous defects in the dwelling, and within a few days, she had no hot water. Investigation revealed that the flame of the water heater had been extinguished by accumulated sewage and water in the basement which also produced a foul odor throughout the house. The tenant notified the landlord, who came to the premises a number of times, each time pumping the sewage and water from the basement onto the sidewalk and relighting the water heater. These and other problems persisted from July through October 1988.

In November 1988, the tenant notified the landlord that she would withhold rent until the sewage problem was solved permanently. The situation did not improve, and an inspection by the Ogden City Inspection

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Division (the division) in December 1988 revealed that the premises were unsafe for human occupancy due to the lack of a sewer connection and other problems. Within a few weeks, the division made another inspection, finding numerous code violations which were a substantial hazard to the health and safety of the occupants. The division issued a notice that the property would be condemned if the violations were not remedied.

After the tenant moved out of the house, the landlord brought suit in the second circuit court to recover the unpaid rent. The tenant filed a counterclaim, seeking an offset against rent owed because of the uninhabitable condition of the premises and seeking damages, attorney fees, and declaratory relief under the Utah Consumer Sales Practices Act, Utah Code Ann. §§ 13-11-1 to -23. The tenant also moved for removal to the district court pursuant to Utah Code Ann. § 13-11-6. The motion was granted. ¹

At trial, the landlord was awarded judgment of unpaid rent of $770, the full rent due under the parties' original agreement. The tenant was denied any offsets, and her counterclaim was dismissed, the court holding that the Utah Consumer Sales Practices Act did not apply to landlord/tenant transactions and, if it did, the landlord had not engaged in any deceptive act. This appeal followed, raising two issues: First, may a tenant recover at common law for breach of a warranty of habitability? Second, does the Utah Consumer Sales Practices Act apply to residential rental transactions, and if the Act is applicable, did the landlord in this case commit an unconscionable or deceptive act in violation of it?

The discussion concerning the warranty of habitability contained in the first section of this opinion reflects the unanimous view of the members of this court. The second section, discussing whether the renting of residential housing is a consumer transaction within the meaning of the Utah Consumer Sales Practices Act (UCSPA), reflects only the view of the author and Justice Zimmerman. The remaining members of the court do not consider it necessary in this case to reach this question because of the likelihood that defendant will receive adequate relief on her counterclaims under the warranty of habitability doctrine, as explained in Justice Howe's separate opinion. They may or may not prove to be right, but I include my views on the UCSPA for the benefit of the trial court and the bar nonetheless. See Utah R.App.P. 30(a); Hiltsley v. Ryder, 738 P.2d 1024, 1026 (Utah 1987) (Zimmerman, J., concurring).

I. WARRANTY OF HABITABILITY

At common law, the leasing of real property was viewed primarily as a conveyance of land for a term, and the law of property was applied to landlord/tenant transactions. At a time when the typical lease was for agricultural purposes, it was assumed that the land, rather than any improvements, was the most important part of the leasehold. See generally 2 R. Powell, The Law of Real Property p 221, at 16-7 to -9, p 233, at 16B-39 to -40 (1991); Javins v. First Nat'l Realty Corp., 428 F.2d 1071, 1077 (D.C.Cir.), cert. denied, 400 U.S. 925, 91 S.Ct. 186, 27 L.Ed.2d 185 (1970). Under the rule of caveat emptor, a tenant had a duty to inspect the premises to determine their safety and suitability for the purposes for which they were leased before entering a lease. Moreover, absent deceit or fraud on the part of the landlord or an express warranty to the contrary, the landlord had no duty to make repairs during the course of the tenancy. See Jespersen v. Deseret News Publishing Co., 119 Utah 235, 225 P.2d 1050, 1053 (1951). Under the law of waste, it was the tenant's implied duty to make most repairs. See Cluff v. Culmer, 556 P.2d 498, 499 (Utah 1976).

Unlike tenants in feudal England, most modern tenants bargain for the use of structures on the land rather than the land itself. See Williams v. Melby, 699 P.2d

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723, 727 (Utah 1985). Modern tenants generally lack the necessary skills or means to inspect the property effectively or to make repairs. Javins, 428 F.2d at 1078-79. Moreover, the rule of caveat emptor assumes an equal bargaining position between landlord and tenant. Modern tenants, like consumers of goods, however, frequently have no choice but to rely on the landlord to provide a habitable dwelling. See Javins, 428 F.2d at 1079. Where they exist, housing shortages, standardized leases, and racial and class discrimination place today's tenants, as consumers of housing, in a poor position to bargain effectively for express warranties and covenants requiring landlords to lease and maintain safe and sanitary housing. Javins, 428 F.2d at 1079; Green v. Superior Court, 10 Cal.3d 616, 111 Cal.Rptr. 704, 709, 517 P.2d 1168, 1173 (1974).

In consumer law, implied warranties are designed to protect ordinary consumers who do not have the knowledge, capacity, or opportunity to ensure that goods which they are buying are in safe condition. See Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 78 (1960); Utah Code Ann. §§ 70A-2-314 to -316 (implied warranties contained in Uniform Commercial Code). The implied warranty of habitability has been adopted in other jurisdictions to protect the tenant as the party in the less advantageous bargaining position.

The concept of a warranty of habitability is in harmony with the widespread enactment of housing and building codes which reflect a legislative desire to ensure decent housing. See Hall v. Warren, 632 P.2d 848, 850 (Utah 1981). It is based on the theory that the residential landlord warrants that the leased premises are habitable at the outset of the lease term and will remain so during the course of the tenancy. See Javins, 428 F.2d at 1081. The warranty applies to written and oral leases, see Javins, 428 F.2d at 1077 n. 29, and to single-family as well as to multiple-unit dwellings. The warranty of habitability has been adopted, either legislatively or judicially, in over forty states and the District of Columbia. See 2 R. Powell, The Law of Real Property p 233, at 16B-50 to -51 n. 42 (cases), p 233, at 16B-64 (statutes) (1991).

In recent years, this court has conformed the common law in this state to contemporary conditions by rejecting the strict application of traditional property law to residential leases, recognizing that it is often more appropriate to apply contract law. See Reid v. Mutual of Omaha Ins. Co., 776 P.2d 896, 902 n. 3 (Utah 1989); Williams v. Melby, 699 P.2d at 726-27; Hall v. Warren, 632 P.2d at 850. Similarly, we have expanded landlord liability in tort. See Williams; Hall; Stephenson v. Warner, 581 P.2d 567 (Utah 1978) (landlord must use ordinary care to ensure leased premises are reasonably safe). Consistent with prevailing trends in consumer law, products liability law, and the law of torts, we reject the rule of caveat emptor and recognize the common law implied warranty of habitability in residential ² leases.

The determination of whether a dwelling is habitable depends on the individual facts of each case. To guide the trial court in determining whether there is a breach of the warranty of habitability, we describe some general standards that the landlord is required to satisfy. We note initially that the warranty of habitability does not require the landlord to maintain the premises in perfect condition at all times, nor does it preclude minor housing code violations or other defects. Moreover, the landlord will not be liable for defects caused by the tenant. See Javins, 428 F.2d at 1082 n. 62; Hinson v. Delis, 26 Cal.App.3d 62, 102 Cal.Rptr. 661 (1972); Marini v. Ireland, 56 N.J. 130, 265 A.2d 526 (1970). Further, the landlord must have a reasonable time to repair material defects before a breach can be established.

As a general rule, the warranty of habitability requires that the landlord maintain "bare living requirements," see Academy Spires, Inc. v. Brown, 111 N.J.Super. 477, 268 A.2d 556, 559 (1970),

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and that the premises are fit for human occupation. See Mease v. Fox, 200 N.W.2d 791 (Iowa 1972); Hilder v. St. Peter, 144 Vt. 150, 478 A.2d 202, 208 (1984). Failure to supply heat or hot water, for example, breaches the warranty. A breach is not shown, however, by evidence of minor deficiencies such as the malfunction of venetian blinds, minor water leaks or wall cracks, or a need for paint. See Academy Spires, Inc. v. Brown, 268 A.2d at 559.

Substantial compliance with building and housing code standards will generally serve as evidence of the fulfillment of a landlord's duty to provide habitable premises. Evidence of violations involving health or safety, by contrast, will often sustain a tenant's...