Opinion
Nos. 47584-3-I, 49371-0-I.
Filed: February 18, 2003. DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION
Appeal from Superior Court of King County, No. 98-2-14585-4, Hon. Stephen G. Scott, October 12, 2000, Judgment or order under review.
Counsel for Appellant(s), Howard K. Todd, 5508 35th Ave N.E. Ste 102, Seattle, WA 98105-2312.
Counsel for Respondent(s), Elena L. Garella, Ste 301, 927 N Northlake Way, Seattle, WA 98103.
William J. Crittenden, Ste 301, 927 N Northlake Way, Seattle, WA 98103.
Counsel for Other Parties, Susan G. Diamondstone, 2722 Colby Ave Ste 722, Everett, WA 98201.
The trial court did not err in granting the equitable remedy of rescission where the landlord failed to deliver exclusive possession of an apartment on the commencement of the tenancy. Affirmed.
FACTS
Christine Phillips and Karen Calagna rented a Capitol Hill apartment from Shahab Khademi in March 1998. Prior to the rental, the unit was part of a commercial beauty salon and Khademi was remodeling the unit into an apartment when the lease was made. Khademi stated that the unit would be ready for occupancy on March 25, 1998, and the lease was to begin on that date. Phillips and Calagna paid Khademi for the first and last months' rent and a cleaning and maintenance fee for a total sum of $1,900. Khademi did not provide them with a copy of the lease or a statement of conditions under which the deposit would be refunded. Phillips and Calagna picked up the keys on March 25, but the remodeling was not completed that day or the next two days. Phillips and Calagna offered to modify the lease to begin on April 1. Khademi refused, stating that the lease began on March 25. Phillips and Calagna terminated the lease and demanded that their rent and cleaning deposit be refunded. Khademi rented the unit to a new tenant on April 2, but withheld the amounts paid by Phillips and Calagna for more than a month. When he returned the rent, he withheld $283 for the period before the unit was rented to the new tenant. Khademi telephoned Phillips' supervisor and coworkers and told them that Phillips and Calagna were lesbians. He also threatened to call other persons. Phillips and Calagna obtained a protective order against Khademi preventing him from further personal contact with them or their workplace. Phillips and Calagna filed suit against Khademi to recover all of their rent; for violations of the lease, the Residential Landlord-Tenant Act (RLTA), and City of Seattle ordinances; tort claims against Khademi based on his outrageous conduct; and violations of a Seattle anti-discrimination ordinance, claiming over $10,000 in damages. Khademi counterclaimed for additional rent covering periods during which the unit was rented to the new tenant. Khademi then made a settlement offer of $600 to only Phillips, and the women declined.
Chapter 59.18 RCW.
In 1999, the tort claims were dismissed on summary judgment. The case was sent to mandatory arbitration. Phillips and Calagna learned that no certificate of occupancy had been obtained when the unit was remodeled that would have allowed use of the unit as a residence. They submitted an additional theory to the arbitrator that the lease was illegal and attached applicable code provisions to their arbitration brief.
In 2000, the arbitrator held that rescission was justifiable because Khademi had not delivered exclusive possession of the unit to Phillips and Calagna and the rental agreement was illegal due to the lack of a certificate of occupancy, as required by the City of Seattle building code.
The arbitrator ordered Khademi to return the $283 to Phillips and Calagna and awarded them $6,584 in fees and costs pursuant to the RLTA and the Superior Court Mandatory Arbitration Rules (MAR). Khademi requested and received a trial de novo.
A trial court dismissed Phillips and Calagna's motion for summary judgment that alleged the lease was an illegal contract under the City of Seattle building code. The court held that they had failed to plead this argument or the code as required by CR 9(i), and denied their motion to amend the complaint. The case was reassigned and the second trial court urged the parties to settle. Phillips and Calagna made an offer to walk away and have each party pay their own attorney fees and costs, but Khademi rejected the offer. The trial judge indicated that he would grant a mistrial if Khademi felt that the judge would be influenced by Khademi's decision not to settle. Khademi declined the court's offer. After a three-day trial the trial court entered findings of fact and conclusions of law.
Although Khademi implied at trial that Calagna had no standing, the court ruled otherwise. The court also held that Khademi had failed to deliver exclusive possession and had breached the warranty of habitability. The findings and conclusions were later discovered missing from the court file, but a replacement copy was signed by the trial court and filed on October 23, 2000, noting that they were originally entered on September 9, 2000. After examining cost sheets submitted by Phillips and Calagna's attorneys, the court entered separate findings of fact and conclusions of law on attorney fees, awarding an amount of $38,555.13. Khademi appealed all the court's rulings, then filed motions for a new trial and for recusal of the trial judge based on alleged prejudice. Both motions were denied. Phillips and Calagna cross appeal their dismissed illegal contract theory and request attorney fees.
The trial court's findings including the following:
— Phillips and Calagna were generally more credible than Khademi. Findings of fact 8, 21, 22. — Khademi insisted the lease begin on March 25, 1998, and represented that the apartment would be ready on that date. Finding of fact 9. — The remodeling work was not done on March 25, March 26, or March 27. Defects included, among others, leaks in the kitchen and bathroom sinks and standing water, exposed electrical outlets, no smoke detectors, non-opening windows in the bedroom, and construction dust and debris throughout the apartment. Findings of fact 17, 18. — Phillips and Calagna did not accept possession of the unit by accepting keys from Khademi. Finding of fact 30. — Phillips and Calagna were unwilling to take possession given the condition of the apartment and declined to take possession until the work was completed. Findings of fact 31, 32. — Khademi rented the apartment to a new tenant on April 2, 1998. Finding of fact 40. — Khademi failed to prove he suffered any damages as a result of Phillips and Calagna's rejection of the apartment. Finding of fact 43.
The trial court's conclusions including the following:
— Calagna had standing under the lease to litigate all claims. Conclusion of law 1. — The unit was not ready for residency on March 25 and Phillips and Calagna were not required to take possession. Conclusion of law 2. — Khademi was not able to and did not deliver exclusive possession of the premises to Phillips and Calagna on March 25, 1998. By not having the unit ready for occupancy, Khademi breached the implied covenant of exclusive possession. Conclusion of law 3. — Based on the defects in the apartment taken as a wholel, Khademi breached the implied covenant of habitability. Conclusion of law 4. — Phillips and Calagna were entitled to rescission under common law. Conclusion of law 14. — Phillips and Calagna were entitled to return of the $283 withheld. Conclusion of law 15. — Phillips and Calagna were not required to accept the defective apartment or give Khademi notice of defective conditions under the RLTA before terminating the lease. Conclusion of law 19. — Khademi had actual notice of the defective conditions of the apartment. Conclusion of law 20. — Phillips and Calagna were entitled to reasonable attorney fees and costs under the lease agreement. Conclusion of law 25. Because Khademi requested a trial de novo after arbitration and failed to improve his position, Phillips and Calagna were also entitled to attorney fees and costs incurred after arbitration under MAR 7.3 and RCW 7.06.060. Conclusion of law 26.
DISCUSSION 1. Calagna's Standing under the RLTA.
Khademi argues that the trial court erred in ruling that Calagna had standing to raise and litigate claims under the rental agreement and the RLTA because she was a party to the agreement. He argues that Calagna was not a tenant. We disagree. A tenant is defined by the RLTA as an individual `who is entitled to occupy a dwelling unit primarily for living or dwelling purposes under a rental agreement.' Both Calagna and Phillips signed the lease agreement with Khademi, thus Calagna was a tenant. Khademi also asserts that because Phillips and Calagna had repudiated the agreement, they had also repudiated their right to enforce a tenant's remedies. No provision in the RLTA provides that when a tenant repudiates an agreement, he or she cannot avail themselves of the remedies of the RLTA. Indeed, the RLTA provides that when a landlord is remiss in his or her duties, tenants may pursue `remedies otherwise provided him by law{,}' which would necessarily include the common law remedies of rescission or repudiation of the rental contract. Khademi's assertion that Calagna was not current in rent is similarly disingenuous. Khademi theorizes that because Calagna did not pay the initial rent and deposit from her own accounts, she was not current in her rent, as required by the RLTA. The record shows that Phillips and Calagna paid $1,900 for first and last months' rent and security deposit. They never occupied the unit and Khademi again rented it on April 2, 1998. It does not matter whether the rent and deposit came from Phillips' account or Calagna's account. Both signed the lease and were liable for rent under the RLTA. The record shows that the women were tenants under the meaning of RLTA and were current in their rent. The trial court did not err in finding that both Phillips and Calagna had standing.
2. Trial Court's Entry of Findings of Fact and Conclusions of Law
Khademi argues that the trial court erred in signing and filing an identical replacement copy of the original findings and conclusions entered after he filed his notice of appeal, and that this court cannot rely on the findings. Khademi claims the findings of fact entered on October 23, 2000 do not reflect the trial court's considered judgment. We disagree.
The court made an oral decision after hearing three days of argument at trial. After considering both parties' proposed findings and conclusions, the court noted that it was signing written findings of fact and conclusions of law on September 26, 2000. The same trial judge then signed replacement copies of the findings on October 23, 2000, noting that they were the same as those entered on September 26, 2000 but which were not in the court file. These written findings closely reflect the court's oral decision. Khademi's implication that the trial judge has misled this court is unfair and untrue.
Wold v. Wold, 7 Wn. App. 872, 503 P.2d 118 (1972).
Even though Khademi filed his notice of appeal prior to the filing of the replacement findings, the proper action to take would have been to file a motion to vacate or demand that findings be filed, not a notice of appeal. There is no indication that either the oral decision or original order were modified, thus a motion and argument by the parties were not required, as Khademi contends, because he had the opportunity to object to the findings when they were originally signed. Because Khademi has not shown that any of the trial court's findings of fact are unsupported by substantial evidence, they are verities on appeal.
CR 60(a); CR 52(d).
RAP 7.2(e). Further, although Khademi may have filed his first notice of appeal prior to the filing of the findings and conclusions, he fails to inform this court that he filed various motions for relief after his first notice of appeal: a motion for reconsideration with the trial court on October 23, 2000; a motion for relief of judgment on September 19, 2001; and a second notice of appeal on October 11, 2001. The trial court considered Khademi's motions. He cannot now argue that the court acted without providing him an opportunity to present his objections and has not shown the findings and conclusions were improperly entered. The findings and conclusions as written and filed by the trial court are valid.
Streater v. White, 26 Wn. App. 430, 432, 613 P.2d 187 (1980) (citing Beeson v. Atlantic-Richfield Co., 88 Wn.2d 499, 563 P.2d 822 (1977)).
3. Landlord's Covenant/Duty to Deliver Exclusive Possession to Tenant
Khademi asserts that the trial court erred in finding that the lease was subject to rescission for breach of the landlord's duty to deliver possession or the implied covenant of exclusive possession, and breach of the implied warranty of habitability. We review the trial court's decision to award the equitable remedy of rescission for an abuse of discretion.
Willener v. Sweeting, 107 Wn.2d 388, 397, 730 P.2d 45 (1986); Wilhelm v. Beyersdorf, 100 Wn. App. 836, 848, 999 P.2d 54 (2000).
Implied in every lease agreement is a covenant, or duty of the landlord, to deliver exclusive possession to the tenant. Preventing a tenant from gaining exclusive possession to land to which he or she is entitled under an agreement breaches this covenant and excuses any obligation to pay rent. Khademi breached this covenant and Phillips and Calagna refused to take possession of the apartment with the defects.
Draper Machine Works, Inc. v. Hagberg, 34 Wn. App. 483, 486, 663 P.2d 141 (1983).
Draper Machine Works, 34 Wn. App. at 486. The lease agreement here similarly provided that if Khademi `fails to deliver possession of the premises for any reason at the time of commencement of this tenancy . . . Tenant shall not be liable for any rent until such time as Landlord can deliver possession.'
The record shows that Khademi promised the apartment would be ready on March 25. However, the apartment was not completed on that date or even two days later. Khademi then insisted that Phillips and Calagna take possession of the apartment while renovation work continued. The women offered to have the lease altered to begin on April 1, but Khademi refused.
When Phillips and Calagna informed Khademi that the apartment was not acceptable, Khademi leased the property to someone else. Khademi did not deliver exclusive possession to Phillips and Calagna on the date indicated in the lease, or thereafter. Where time is of the essence in performance of a lease, and a renovated premises is not delivered on the date agreed upon, rescission of the lease is permissible. Here, both parties agreed that the premises were to be ready and renovated by a certain date. The premises were not ready, so Phillips and Calagna were entitled to the equitable remedy of rescission for the landlord's failure to deliver exclusive possession of the property on the agreed date.
Univ. Props., Inc. v. Moss, 63 Wn.2d 619, 621, 388 P.2d 543 (1964).
The fact that Khademi tendered, and Phillips and Calagna accepted, keys to the apartment on March 25 does not mean that Phillips and Calagna accepted the apartment in its unfinished condition. Phillips and Calagna accepted the keys before they were aware of the condition of the apartment, and then insisted that the apartment's defects be fixed. Phillips and Calagna waited a few days for the repairs to be made, but did not choose to take the property with the alleged defects or with workers inside the apartment. Unlike the plaintiff in Draper Machine Works, Inc. v. Hagberg, Phillips and Calagna did not occupy the property for any period of time; they attempted to rescind the lease without ever moving in. Under the facts of this case, Khademi failed to deliver exclusive possession because he and workers were present in the apartment on the day of delivery and the day after, and work still remained to be done. Thus, Phillips and Calagna's possession could not be exclusive. The trial court did not err in finding that Khademi breached his duty to deliver exclusive possession, that Phillips and Calagna did not take possession, and that the proper remedy was rescission.
Schlumpf v. Sasake, 38 Wn. 278, 281, 80 P. 457 (1905).
Draper Machine Works, 34 Wn. App. at 486-87.
Because we have held that rescission was available for Khademi's breach of his duty to deliver possession, Phillips and Calagna's argument that Khademi also breached the warranty of habitability is moot, although persuasive.
4. Attorney Fees.
The trial court awarded attorney fees and costs to Phillips and Calagna pursuant to RCW 7.06.060 and MAR 7.3 because it found that Khademi requested a trial de novo after losing at arbitration and failed to improve his position at trial. The court also found that Phillips and Calagna were entitled to reasonable attorney fees and costs under the lease agreement.
The trial court ultimately entered findings and conclusions on attorney fees and costs, and awarded Phillips and Calagna $38,555.13. The amount of attorney fees awarded is discretionary and will only be overturned for a manifest abuse of discretion. Khademi asserts that entry of this award was error because the women's recovery was less than the $600 settlement offered by Khademi; Phillips and Calagna were denied relief on their claims for discrimination, harassment, outrage, and various violations of the RLTA; and they failed to file a cost bill as required by RCW 4.84.090. Khademi further argues that the trial court abused its discretion when it denied his attorney fees and requests fees on appeal. Phillips and Calagna cross appealed and argue that the trial court erred in failing to award attorney fees after Khademi's motion for a new trial. Phillips and Calagna pleaded damages in their first complaint in excess of $10,000.
Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 65, 738 P.2d 665 (1987).
Thus, Khademi's alleged settlement offer could not be taken into consideration when determining fees because the settlement provisions, chapter 4.84 RCW, are inapplicable to this case, and because the settlement offer was made only to Phillips. The trial court did not err in holding that Khademi's `settlement offer' did not affect the final award of attorney fees. Secondly, the mandatory arbitration rules specify that a party who seeks a trial de novo and fails to improve his or her position must pay the other party's attorney fees. Despite Khademi's assertions to the contrary, he did not improve his position upon a new trial. Phillips and Calagna received rescission and return of the $283 at arbitration, as well as attorney fees. Although one of their claims was dismissed on summary judgment prior to the trial de novo, they were awarded the same remedy after trial. Although the lease did not contain a prevailing party provision, Phillips and Calagna clearly were the prevailing party. A prevailing party is the one against whom no affirmative judgment is entered and turns on the substance of the relief that is awarded to the parties. Here, the relief was awarded to Phillips and Calagna; no affirmative judgment was entered against them, and only Khademi was required to pay the $283.
RCW 4.84.250-.280; Reynolds v. Hicks, 134 Wn.2d 491, 502, 951 P.2d 761 (1998).
MAR 7.3.
See, e.g., Am. Nursery Prods., Inc. v. Indian Wells Orchards, 115 Wn.2d 217, 234-35, 797 P.2d 477 (1990).
One Pacific Towers Homeowners' Ass'n v. HAL Real Estate Invs., Inc., 108 Wn. App. 330, 352, 30 P.3d 504 (2001).
Finally, the trial court reviewed documentation from all attorneys before making its award determination, including documentation for costs separate from documentation for attorney fees. Thus, Phillips and Calagna complied with the provisions of RCW 4.84.090. Additionally, in calculating attorney fees, a court must multiply each attorney's reasonable hourly rate of compensation by the total hours expended in the litigation by each attorney, as documented by counsel, considering the difficulty of the problem, each lawyer's skill and experience, and the amount involved. The trial court did that here. Thus, Khademi has not shown that the trial court abused its discretion in calculating and awarding attorney fees and costs, or in denying fees and costs to Khademi. Phillips and Calagna have also not shown that the trial court abused its discretion in denying further costs after Khademi filed and lost a motion for a new trial. The court specifically found that the motion was not frivolous and thus the parties would bear their own costs. However, Phillips and Calagna's request of an award of attorney's fees under RAP 18.1 will be granted. Because we affirm this case on the issue of exclusive possession, Phillips and Calagna's other issues on cross appeal will not be considered.
Am. Nursery Prods., 115 Wn.2d at 234 (citing Singleton v. Frost, 108 Wn.2d 723, 733, 742 P.2d 1224 (1987)).
Affirmed.
APPELWICK and COLEMAN, JJ., concur.