Winger v. CM Holdings, L.L.C.

• Citation: 881 N.W.2d 433
• Decision Date: 24 June 2016
• Docket Number: No. 14–0199.,14–0199.
• Parties: Kathryn WINGER and Timothy Potts, Appellants, v. CM HOLDINGS, L.L.C., Appellee.
• Court: United States State Supreme Court of Iowa

881 N.W.2d 433

Kathryn WINGER and Timothy Potts, Appellants,
v.
CM HOLDINGS, L.L.C., Appellee.

No. 14–0199.

Supreme Court of Iowa.

June 24, 2016.

881 N.W.2d 436

Robert G. Rehkemper and Cory F. Gourley of Gourley, Rehkemper & Lindholm, P.L.C., for appellants.

Brenda K. Wallrichs of Lederer Weston Craig PLC, Cedar Rapids, and Michael A. Carmoney and Jack W. Leverenz of Carmoney Law Firm, PLLC, Des Moines, for appellee.

WATERMAN, Justice.

This wrongful-death action arises from a fatal fall from an apartment balcony and presents several issues on the applicability of the doctrine of negligence per se to an alleged municipal housing code violation. The thirty-two-inch high balcony railing complied with the local housing code when the apartment complex was constructed in 1968, but unless exempted under a grandfather provision, it is ten inches shorter than the current housing code allows. Before the accident, a local housing inspector cited the landlord for that code violation. The inspector reasoned that an attached plastic lattice modified the railings to eliminate

881 N.W.2d 437

grandfather status. The landlord did not appeal that finding but rather ordered the higher railings and asked for an extension of time to install them. The City of Des Moines Housing Appeal Board (HAB), without a contested hearing, found the property was in violation but granted a three-month extension to install compliant railings and suspended the $1090 fine. The plaintiffs' daughter fell over the original railing to her death three days later.

The plaintiffs filed a premises liability action alleging the thirty-two-inch railing violated the local housing code. Their expert testified the forty-two-inch railing would have prevented the accident. The district court ruled the landlord was bound by the HAB's determination that forty-two-inch railings were required and rejected the landlord's arguments that the property was grandfathered out of the current code or that the HAB's extension of time to install higher railings excused tort liability. The court instructed the jury that the landlord's violation of the housing code constituted negligence per se and limited the jury to deciding causation, comparative fault, and damages. The jury found the landlord sixty-five percent at fault, the plaintiffs' daughter thirty-five percent at fault, and awarded combined total damages of $1,750,000 ($1,137,500 after reduction for comparative fault). In posttrial rulings, the district court concluded the doctrine of negligence per se did not apply to a local housing code and ordered a new trial. Both sides appealed, and we transferred the case to the court of appeals, which affirmed with one judge dissenting and another specially concurring. We granted the applications for further review by both sides.

For the reasons explained below, we hold that the doctrine of negligence per se applies to the violation of a municipal housing code and is not limited to statewide laws. Additionally, the district court correctly rejected the landlord's argument that the old code applied as a matter of law. The HAB's extension of time for the landlord to comply with the code merely suspended administrative penalties without excusing tort liability. The district court, however, erred by instructing the jury on the basis that the new code applied as a matter of law. The HAB's determination of a code violation does not have preclusive effect in this wrongful-death action. On remand, the parties may present evidence on whether prior modifications eliminated grandfather status. Accordingly, we vacate the decision of the court of appeals, reverse the district court's posttrial rulings, and remand this case for a new trial.

I. Background Facts and Proceedings.

On July 23, 2011, twenty-one-year-old Shannon Potts came to the Grand Stratford Apartments in Des Moines after work to socialize with friends. She arrived at their second-floor apartment around 1:30 a.m. slightly intoxicated and watched movies with a small group. She continued drinking until about 4 a.m. when her friends hid the alcohol. Shannon asked one to talk with her privately on the balcony. They talked for about twenty minutes before her friend returned inside to get another drink. While inside, her friend heard a scream and a crash. Shannon had gone over the railing. Her friends ran downstairs and found her unresponsive. A bystander called 911. Shannon was rushed to the hospital with a fractured neck and crushed spine and was pronounced dead there. Toxicology tests indicated she was intoxicated at the time of her fall and had marijuana and Xanax in her bloodstream.

Mark Critelli was the sole owner of the Grand Stratford Apartments until February

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15, just over five months before Shannon's fatal fall. This apartment complex consists of a duplex and three larger buildings constructed in 1968. The apartments were built to comply with the 1968 housing code, which required guardrails between thirty- and thirty-four inches high. Des Moines, Iowa, Municipal Code § 24–28.06 (1962). The original black iron railings are thirty-two inches high and remained in place when Shannon fell forty-three years later. In 1979, the Des Moines, Iowa, Municipal Code was amended to require guardrails of forty-two inches in height. Des Moines, Iowa, Municipal Code § 14–10(b) (1979). The 1979 code included a grandfather provision stating that “[g]uardrails which were installed prior to the passage of this subchapter and were in conformance with the Health and Safety Housing Code then in effect may be allowed to remain if in structurally sound condition.” Id. In 2005, the guardrail ordinance stated, “Multiple family dwellings with porches, balconies or raised floor surfaces located more than 30 inches above the floor or below grade shall have guards not less than 42 inches in height.” Des Moines, Iowa, Municipal Code § 60–127(c) (2005). The grandfather provision was revised to state, “Any structure that was in compliance on the day previous to the adoption of this code will be allowed to remain.” Id. § 60–5. The ordinance was admitted into evidence without objection.

The HAB found Critelli was a “habitual violator” of the code. All properties under his ownership were put on an accelerated inspection schedule. In 2009, Critelli attached a forty-eight-inch high white plastic lattice to the guardrails with zip ties. The lattice served as a privacy screen to shield each balcony from view. Although Critelli received numerous notices of violations regarding this property, none addressed the guardrails before February 2011.

Eddie Leedom is a city inspector assigned to the Neighborhood Inspection Unit. He inspected the Grand Stratford Apartments on February 10 and found 106 code violations, including the guardrail height, broken window screens, and a broken garbage disposal. Leedom concluded the plastic lattice was an alteration to the guardrails that triggered a duty to comply with the current forty-two-inch guardrail requirement. He spoke with the director of the HAB who agreed the thirty-two-inch guardrails were too low.

On February 15, Eric Estes and Merle Laswell formed CM Holdings with Mark Critelli to acquire a controlling ownership interest in the Grand Stratford Apartments. The property was in disrepair, and CM Holdings began renovating the apartments to increase their rental value. As part of their renovation plan, the new owners vacated two of the apartment buildings but permitted tenants to remain in the third. Estes and Laswell planned to allow tenants to move from the unrenovated building into the newly renovated buildings as upgrades were completed.

Estes received the notice of violations on February 24. The violations were not prioritized, so Estes gave the list of violations to his general contractor without identifying which violations to address first. By March 31, CM Holdings had fixed fifty-eight violations. On an inspection on July 5, Leedom noted only six remaining violations. He imposed a $1090 fine for the guardrail-height violations. By July 13, the only remaining infraction was the height of the guardrails, and CM Holdings had ordered new forty-two-inch guardrails.

After each inspection, Leedom sent CM Holdings a notice listing the violations and the remedial action required. Each notice contained a notification of the right to appeal the inspection, stating,

APPEALS: Under section 60–102(a)

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(1) Any owner objecting to a violation cited in this Inspection Notice may file a written appeal with the Neighborhood Inspection Division requesting a hearing before the Housing Appeals Board. An appeal shall be filed within 10 days of the date of the Inspection Notice. Upon the discretion of the Neighborhood Inspection Officer for good cause shown, an untimely appeal may be accepted.

....

At this hearing the appellant shall have the opportunity to be heard, the right to call witnesses and to be represented by counsel.

CM Holdings never appealed any of the notices of violation.

On July 13, ten days before the accident, Estes and Laswell appeared on behalf of CM Holdings at a regularly scheduled HAB meeting to request an extension of time to bring the...