Whalen v. Taylor

• Decision Date: 24 October 1996
• Docket Number: No. 95-540,95-540
• Citation: 925 P.2d 462,278 Mont. 293
• Parties: Timothy J. WHALEN, d/b/a Shannon Rose Apartments, Plaintiff and Appellant, v. John Lewis TAYLOR, Defendant, Respondent, and Cross Appellant.
• Court: Montana Supreme Court

Page 462

925 P.2d 462

278 Mont. 293

Timothy J. WHALEN, d/b/a Shannon Rose Apartments, Plaintiff and Appellant, v. John Lewis TAYLOR, Defendant, Respondent, and Cross Appellant.

No. 95-540.

Supreme Court of Montana.

Submitted on Briefs May 2, 1996.

Decided Sept. 26, 1996.

Rehearing Denied Oct. 24, 1996.

John A. Hauf, Hauf & Forsythe, Billings, for Appellant.

Elizabeth Halverson, Montana Legal Services, Billings, for Respondent.

NELSON, Justice.

Plaintiff, Timothy J. Whalen, (Whalen) initiated this suit in Justice Court for possession of rental property, damages, and attorney fees. Following a trial de novo, the District Court for the Thirteenth Judicial District, Yellowstone County, entered judgment for Defendant, John Lewis Taylor, (Taylor) and awarded Taylor damages and possession of property. From that judgment, Whalen appeals and Taylor cross appeals. We affirm in part, reverse in part and remand.

We address the following issues on appeal:

1. Does substantial evidence support the District Court's finding that Taylor did not abandon the apartment, but that Whalen locked out Taylor in violation of § 70-24-411, MCA?

2. Did Whalen violate §§ 70-24-202 and 70-24-403, MCA, by including a prohibited provision in the rental agreement?

3. Is Taylor entitled to attorney fees under § 70-24-442, MCA, because he prevailed at every stage of the litigation?

4. Did the District Court properly expedite discovery matters and the trial schedule pursuant to § 70-24-427, MCA?

FACTUAL AND PROCEDURAL BACKGROUND

Whalen owns and personally manages the Shannon Rose Apartments located at 703 North 32nd Street in Billings, Montana. Whalen is an attorney, a former legislator, and has owned the Shannon Rose Apartments since 1985. He has used the same rental agreement since 1985. Taylor is a 48-year-old man who works as a janitor in Billings.

On June 23, 1994, Whalen rented an apartment to Taylor under a month-to-month written rental agreement that Whalen had copied from a 1978 Montana Law Review article. Under the agreement, Taylor agreed to pay rent on the first of each month and to pay a security deposit of $250. The rental agreement contained a provision stating that "[a]cceptance of a refund of all or a portion of the deposit by Tenant shall constitute a full and final release of Landlord from any claims of Tenant of any nature whatsoever."

Over the course of the tenancy, Taylor habitually made late rental payments; however, Whalen always accepted those payments. In June 1995, Taylor was again late with the rent payment. In response, Whalen served Taylor a three-day notice to quit by Taylor's paycheck did not arrive on June 16, 1995; however, a co-worker delivered it to Taylor at his apartment on June 17, 1995. Taylor did not pay Whalen the rent during the day on June 17, 1995, and when Taylor arrived home that evening he found that Whalen had changed the locks to his apartment. Whalen had in fact changed the locks after 5:00 p.m. on June 17, 1995. When Taylor arrived home, he tendered the June rent, but Whalen refused to accept it. Taylor then requested possession of the apartment, but Whalen refused because of the delinquent rent. At Taylor's request, Whalen did go back into Taylor's apartment and retrieve some of Taylor's clothing. They then made arrangements for Taylor to retrieve the rest of his possessions the next day. Taylor moved into the Esquire Motor Inn that night. In early July, 1995, Whalen moved into the apartment.

slipping it under Taylor's door on June 7, 1995. On June 13, 1995, the parties verbally agreed to extend the time for payment of the rent to June 16, 1995, the date Taylor expected his next paycheck. However, Taylor did not pay the rent by June 16, 1995, and Whalen gave him no additional notice to quit.

On June 22, 1995, Whalen filed a complaint in Justice Court, Yellowstone County, for possession of the premises, money damages and attorney fees. Taylor counterclaimed for possession, money damages and attorney fees. Taylor prevailed on all claims in Justice Court. On September 13, 1995, Whalen filed a Notice of Appeal to the Montana Thirteenth Judicial District Court, Yellowstone County. After both attorneys moved to substitute two different judges, trial was finally set for October 27, 1995. On October 17, 1995, Whalen served discovery requests on Taylor and the District Court ordered that Taylor answer Whalen's discovery requests by October 23, 1995.

Following a trial de novo, the District Court entered judgment for Taylor, awarding him money damages and possession of the rental property. From this judgment, Whalen appeals and Taylor cross appeals.

DISCUSSION

1. Does substantial evidence support the District Court's finding that Taylor did not abandon the apartment, but that Whalen locked out Taylor in violation of § 70-24-411, MCA?

Our review of a district court's findings of fact is set forth as follows:

This Court reviews the findings of a trial court sitting without a jury to determine if the court's findings are clearly erroneous. Rule 52(a), M.R.Civ.P. A district court's findings are clearly erroneous if they are not supported by substantial credible evidence, if the trial court has misapprehended the effect of the evidence, or if a review of the record leaves this Court with the definite and firm conviction that a mistake has been committed.

Solem v. Chilcote (1995), 274 Mont. 72, 76, 906 P.2d 209, 211-12 (quoting YA Bar Livestock Company v. Harkness (1994), 269 Mont. 239, 887 P.2d 1211).

The Montana Residential Landlord and Tenant Act of 1977 (MRLTA) limits a landlord's recovery of possession of property. See § 70-24-428, MCA. As provided under MRLTA, "[e]xcept in the case of abandonment, surrender, or as permitted in this chapter, a landlord may not recover or take possession of the dwelling unit by action or otherwise...." Section 70-24-428, MCA. Thus, a landlord may take possession of a dwelling unit only under three circumstances: 1) abandonment; 2) surrender; or 3) as permitted in MRLTA. This case deals only with Taylor's alleged abandonment and Whalen's unauthorized actions.

This Court has defined abandonment as "the absolute relinquishment of the premises consisting of the tenant's act or omission and intent to abandon." Johnston v. American Reliable Ins. (1992), 253 Mont. 253, 258, 833 P.2d 176, 180 (wherein we held that landlord's one phone call concerning tenant's whereabouts was not enough evidence to show tenant's abandonment). In an earlier case, this Court did find evidence of abandonment. Napier v. Adkison (1984), 209 Mont. 163, 678 P.2d 1143. While we decided Napier prior to adopting the formal definition of abandonment in Johnston, we evaluated similar evidence to determine whether the tenants had abandoned the premises. In Napier, when the tenants did not make the rental payment on time, the landlord repeatedly stopped by the tenants' rental unit, but never found the tenants there. Furthermore, the landlord found that the tenants' left their dogs unattended on the premises. Finally, the landlord called the tenants' daughter who stated she did not know where her parents were. All of this evidence clearly supported the District Court's conclusion that the tenants had abandoned their rental unit. Unlike Napier, the evidence in the case before us on appeal does not indicate that Taylor abandoned his apartment.

Taylor lived consistently in his apartment for over one year. Despite his habitual lateness in paying the rent, Taylor always made arrangements with Whalen for payment. When Taylor was again late with payment of his June 1995 rent, he made arrangements with Whalen to pay the rent on June 16, 1995, when Taylor expected his paycheck to arrive. However, because his paycheck did not arrive on time, Taylor did not meet the June 16th deadline. Instead, Taylor tendered the June rent the following evening after he had received and cashed his paycheck.

In response to Taylor's failure to pay rent on June 16, 1995, Whalen changed the locks to Taylor's apartment after 5:00 p.m. on June 17, 1995, claiming that Taylor had abandoned the premises. However, later that same evening, Taylor arrived at his apartment and upon meeting Whalen tendered the June rent. Further, after Whalen declined to accept the rent, he refused to allow Taylor access to the apartment to collect his belongings inside.

Nothing in the evidence indicates "absolute relinquishment" of the apartment by Taylor. Taylor kept his belongings in the apartment. He contacted Whalen as to the delinquent June rent and asked for more time to pay, showing his intention to continue to live there. Further, Taylor did ultimately tender the June rent on the same day that Whalen changed the locks to Taylor's apartment. Based on these facts, Taylor lacked an intent to abandon and he committed no act or omission to indicate abandonment of his apartment. See Johnston, 833 P.2d at 180. We hold that substantial evidence supports the District Court's conclusion that Taylor did not abandon his apartment, but rather that he intended to pay the rent and continue to live there.

As noted, a landlord's recovery of possession is limited to three circumstances: abandonment, surrender, or as permitted under MRLTA. Here, Taylor did not abandon his apartment and the parties have raised no issue concerning surrender. Therefore, Whalen's only other option under § 70-24-428, MCA, was to pursue a permitted course of action under MRLTA, that is, a proper eviction procedure. A proper eviction procedure for a tenant's failure to pay rent is set forth in §§ 70-24-422(2)(a), 70-24-108 and 70-24-427, MCA. If a tenant does not pay rent when due, a landlord must give the tenant written notice indicating that rent must be paid within three days or the landlord intends to terminate the rental agreement. Sections 70-24-422(2)(a) and 70-24-108, MCA. If the tenant still does not pay, the landlord may terminate the rental agreement and...