Opinion
No. 2 CA-CV 2016-0078
04-18-2017
KEVIN SACK, Plaintiff/Counterdefendant/Appellee/Cross-Appellant, v. BOBBY TATE AND CHRYSTLE PORTER, Defendants/Counterplaintiffs/Appellants/Cross-Appellees.
COUNSEL Curl & Glasson, PLC, Tucson By J.C. Patrascioiu Plaintiff/Counterdefendant/Appellee/Cross-Appellant Southern Arizona Legal Aid, Tucson By Sabrina L. Fladness and Beverly B. Parker Defendants/Counterplaintiffs/Appellants/Cross-Appellees
THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
NOT FOR PUBLICATION
See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f). Appeal from the Superior Court in Pima County
No. C20141731
The Honorable Stephen C. Villarreal, Judge
AFFIRMED IN PART; VACATED IN PART AND REMANDED
COUNSEL Curl & Glasson, PLC, Tucson
By J.C. Patrascioiu
Plaintiff/Counterdefendant/Appellee/Cross-Appellant Southern Arizona Legal Aid, Tucson
By Sabrina L. Fladness and Beverly B. Parker
Defendants/Counterplaintiffs/Appellants/Cross-Appellees
MEMORANDUM DECISION
Presiding Judge Howard authored the decision of the Court, in which Chief Judge Eckerstrom and Judge Vásquez concurred. HOWARD, Presiding Judge:
¶1 Bobby Tate and Chrystle Porter (collectively, "Tenants") appeal from the trial court's entry of judgment following Kevin Sack's action for forcible detainer. They argue the court erred by ruling they owed Sack three months' rent and by denying their claim for retaliatory conduct by Sack. They also argue the court erroneously measured damages and failed to designate them the successful party. Sack cross-appeals, contending the court erred in finding he had unlawfully ousted Tenants, in granting partial summary judgment in Tenants' favor, and in failing to designate him the successful party. Because we conclude the court erred in finding the Tenants had been unlawfully ousted, we vacate in part, but otherwise affirm.
Factual and Procedural Background
¶2 We view the facts in the light most favorable to sustaining the trial court's judgment. Cimarron Foothills Cmty. Ass'n v. Kippen, 206 Ariz. 455, ¶ 2, 79 P.3d 1214, 1216 (App. 2003). In May 2012, Tenants entered into a six-month lease agreement with Sack to rent a property in a rural area outside Tucson for $600 per month, which included electricity. Tenants continued to reside at the home after the initial lease period expired on a month-to-month basis.
¶3 The property was not connected to a municipal water supply, but instead had "a tank and pump system," which Tate helped Sack install before moving into the home. Water is stored in the tank, pressurized, and delivered to all the fixtures in the home. Tenants filled the tank by running a hose from a relative's house across the street.
¶4 In November 2013, a large rainstorm caused the house to flood due to inadequate weatherproofing and damaged Tenants' possessions. Tenants told Sack about the problem, and they discussed digging a channel through the concrete outside the front door to divert water away as a possible solution. Ultimately, however, no agreement was reached as to who would do that work and nothing further was done to rectify the problem.
¶5 After the rainstorm, Porter, along with her and Tate's two children, moved in with relatives because they believed the home was no longer habitable. Tate remained at the house to "watch over [their] belongings" and prevent further damage or theft.
¶6 Tenants did not pay rent in December 2013. Sometime around the end of that month, Sack delivered a five-day pay-or-quit notice demanding rent for December. A.R.S. § 33-1368(B). Tenants did not pay, nor did they pay rent in January or February.
¶7 In early February, Sack filed a forcible detainer action for nonpayment of rent. Tenants counter-claimed, alleging Sack had breached his statutory duty to provide water, A.R.S. § 33-1324(A)(6), failed to maintain the home in a fit and habitable condition, § 33-1324(A)(1), unlawfully ousted them, A.R.S. § 33-1367, and filed the forcible detainer action in retaliation, A.R.S. § 33-1381(B). In late February, Tenants agreed to leave the property and the only remaining issue was damages. In July, an arbiter entered judgment in favor of Sack, and Tenants appealed that judgment to superior court.
¶8 Tenants moved for partial summary judgment on the grounds that Sack had breached his statutory duty to provide water and adequate cooling. The trial court granted the motion but did not award any damages at that time. § 33-1324(A)(1), (4) & (6). Following a bench trial, the court awarded Sack $1,800 for Tenants' nonpayment of rent from December through February, awarded Tenants $600 for property damage resulting from the November 2013 flooding and $1,200 for being unlawfully ousted following that flooding, and concluded Sack had not filed the action in retaliation for Tenants' complaints about the weatherproofing. The court additionally found that, as to Sack's breach of his duty to supply water, there was no diminution of the fair rental value, and therefore Tenants were not entitled to any damages on that claim. A.R.S. § 33-1364(A)(2).
¶9 Tenants timely filed this appeal, and Sack timely filed a cross-appeal. We have jurisdiction pursuant to A.R.S. §§ 12-2101(A)(1) and 12-120.21(A)(1).
Sack asserts this court does not have jurisdiction under § 12-2101(A)(1) because the Tenants contend the property had no rental value. § 12-2101(A)(1) (party may not appeal "actions of forcible entry and detainer when the annual rental value of the property is less than three hundred dollars"). But the parties agreed and the trial court found that the lease was for $600 per month rent, qualifying it for an appeal to this court under the statute. Id.
Unlawful Ouster
¶10 We first address Sack's cross-appeal regarding the trial court's finding of unlawful ouster because our decision affects Tenants' argument regarding the award of three months' rent to Sack. Sack contends the court erred in finding an unlawful ouster as a matter of law because the elements of the statute were not met. We defer to the court's factual findings unless "clearly erroneous," but review its application of the law de novo. Freeman v. Sorchych, 226 Ariz. 242, ¶ 11, 245 P.3d 927, 932 (App. 2011). We review the interpretation of a statute de novo. Castro v. Ballesteros-Suarez, 222 Ariz. 48, ¶ 12, 213 P.3d 197, 201 (App. 2009).
Sack additionally contends the trial court's factual findings were clearly erroneous. However, because we conclude that the court's factual findings do not support a finding of unlawful ouster, we do not address Sack's alternative argument.
¶11 An unlawful ouster occurs, as relevant here, when a landlord "willfully diminishes services to the tenant by interrupting or causing the interruption of electric, gas, water or other essential service to the tenant." § 33-1367. The statute is intended "to deal with the wrongful dispossession situation occasioned . . . by the willful diminution of services." Schaefer v. Murphey, 131 Ariz. 295, 298, 640 P.2d 857, 860 (1982).
¶12 By using the term "willful," the statute requires "[v]oluntary and intentional" conduct by the landlord. Willful, Black's Law Dictionary (10th ed. 2014); see also State v. Lychwick, 222 Ariz. 604, ¶ 9, 218 P.3d 1061, 1063 (App. 2009) (courts rely on statute's plain language "as the best and most reliable index of the [statute's] meaning" and may refer to "established and widely used dictionaries"). Moreover, in order to "interrupt" essential services, those services must have been provided and ongoing before the landlord's intentional conduct. Interrupt, The American Heritage Dictionary 917 (5th ed. 2011) (to "interrupt" is "[t]o break the continuity" of, or "[t]o cause an activity to stop by . . . doing something"); see also § 33-1367.
¶13 The trial court here found that Sack's "failure to maintain weatherproofing of the home led to an unlawful ouster when the Tenants could no longer reside in and enjoy the dwelling after the November 2013 rainstorm." Rather than intentionally interrupting an essential service, such as electricity or gas, Sack at worst passively allowed inadequate weatherproofing to continue, and the November 2013 rainstorm ultimately rendered the home allegedly uninhabitable for Porter and the two children. These facts do not fit the statutory requirements of unlawful ouster, and the court erred in concluding otherwise. § 33-1367; see Mead, Samuel & Co. v. Dyar, 127 Ariz. 565, 570, 622 P.2d 512, 517 (App. 1980) (§ 33-1367 "contemplates unilateral action by the landlord himself effectuating the removal or exclusion"); see also Geiger v. Wallace, 664 P.2d 846, 849 (Kan. 1983) (landlord willfully diminished services, supporting finding of unlawful ouster, by turning off electricity to property while tenants were away). Accordingly, we vacate the court's conclusion that Sack had unlawfully ousted the Tenants and its award of $1,200 for damages in Tenants' favor for that ouster.
Nonpayment of Rent
¶14 Turning to Tenants' appeal, they first argue the trial court erroneously awarded Sack rent for December, January and February because it is "illogical and inequitable" for Sack to collect rent during the time after Tenants had been unlawfully ousted. However, because we have concluded the court erred in finding they were unlawfully ousted, we reject their argument on this issue.
¶15 Tenants appear to suggest the trial court found they had been constructively evicted, as defined by case law, rather than unlawfully ousted, as defined in § 33-1367. See Stewart Title & Trust of Tucson v. Pribbeno, 129 Ariz. 15, 16, 628 P.2d 52, 53 (App. 1981) ("Constructive eviction occurs through intentional conduct by the landlord which renders the lease unavailing to the tenant or deprives him of the beneficial enjoyment of the leased property, causing him to vacate the premises."). Although Tenants had characterized their claim as one for "constructive eviction" at various points in the proceedings, the court clearly stated in its ruling that an "unlawful ouster" had occurred and awarded Tenants damages pursuant to § 33-1367.
¶16 Constructive eviction, unlike unlawful ouster, is a common law claim and the remedies are governed by equitable principles. See Stewart Title & Trust of Tucson, 129 Ariz. at 16, 628 P.2d at 53; see also Restatement (Second) of Property, §§ 6.1 and cmt. h, 10.2 (remedies range from right to terminate lease and recover damages to rent abatement while retaining possession); see also 2 Powell on Real Property § 16B.03[1], [3] (describing variety of remedies available under doctrine of constructive eviction). The trial court did not make any findings concerning constructive eviction and we cannot affirm on that basis. See Gen. Elec. Capital Corp. v. Osterkamp, 172 Ariz. 191, 193, 836 P.2d 404, 406 (App. 1992) (appellate court will affirm if trial court correct for any reason). Accordingly, we remand for the court to consider whether Tenants should be liable for rent. We express no opinion as to whether constructive eviction or any other defenses could apply.
Retaliatory Conduct
¶17 Tenants additionally argue the trial court erred by concluding that nonpayment of rent sufficiently rebutted the statutory presumption of retaliation under § 33-1381. We defer to the court's factual findings but review issues of law de novo. Freeman, 226 Ariz. 242, ¶ 11, 245 P.3d at 932.
¶18 Section 33-1381 protects tenants from retaliatory conduct by their landlord when, inter alia, they make complaints of violations of § 33-1324. When a landlord "bring[s] or threaten[s] to bring an action for possession" within six months of a tenant's complaint, a statutory presumption arises that the action was in retaliation. § 33-1381(A)-(B). The presumption may be rebutted if "evidence is introduced which would support a finding of its nonexistence." § 33-1381(B).
¶19 The trial court here found the statutory presumption of retaliation arose when Sack issued the five-day notice after Tenants complained about the damage caused by the November 2013 flooding. It went on to find, however, that Sack had believed all issues related to the flooding had been addressed, and "was motivated by Tenants' failure to pay December's rent and [Tate's] abusive actions, not by Tenants' complaint about water damage." The evidence, including Sack's testimony, supports this finding.
¶20 Tenants contend that they could not have been in default on rent in December because they had been unlawfully ousted. They reason "[t]he statutory presumption is not rebutted where the Tenants are not liable to pay rent." As we have already concluded, Tenants had not been unlawfully ousted, and thus were still obliged to pay rent. This argument therefore fails.
To the extent Tenants argue the presumption had not been rebutted because Sack's true motive in issuing the five-day notice was that "he did not want to fix the premises and he did not want the Tenants to be able to live there anymore," we note this argument essentially asks us to reweigh the evidence, something we will not do on appeal. Sholes v. Fernando, 228 Ariz. 455, ¶ 15, 268 P.3d 1112, 1117 (App. 2011).
Damages for Landlord's Breach of Duty
¶21 Tenants next argue the trial court erred in calculating the diminution in the fair rental value as damages for Sack's breach of duty to provide water. § 33-1364(A)(2). They contend the property was uninhabitable and, as a matter of law, had a fair rental value of $0. The fair rental value of a property is a factual determination. See CSA 13-101 Loop, LLC v. Loop 101, LLC, 233 Ariz. 355, ¶ 25, 312 P.3d 1121, 1128-29 (App. 2013); see also L & M Inv. Co. v. Morrison, 605 P.2d 1347, 1349-50 (Or. App. 1980) (diminution in fair rental value a factual determination based on evidence presented). We therefore defer to the court's finding on that issue. Freeman, 226 Ariz. 242, ¶ 11, 245 P.3d at 932. We review the court's legal conclusions de novo. In re Estate of Newman, 219 Ariz. 260, ¶ 13, 196 P.3d 863, 868 (App. 2008).
The trial court found Sack had also breached his duty to provide adequate cooling. Because Tenants' argument, like the court's ruling, focuses solely on the failure to provide water, we likewise limit our discussion to that breach of duty. --------
¶22 Pursuant to § 33-1364, a tenant may "[r]ecover damages based upon the diminution in the fair rental value of the dwelling unit" if the landlord fails to supply running water in violation of § 33-1324. Tenants argue the fair rental value of the property was $0, as a matter of law, because the property was "legally uninhabitable" based on Sack's failure to supply water. They appear to suggest a landlord's violation of § 33-1324 necessarily renders a property "legally uninhabitable." Tenants do not, however, cite any legal authority for this proposition or in any way define the term "legally uninhabitable." Rather, under the calculation of damages set forth in § 33-1364, a violation of certain duties enumerated in § 33-1324 diminishes the rental value by an amount that is determined by the court based on the evidence presented. See L & M Inv. Co., 605 P.2d at 1349-50 (affirming trial court's determination as to amount rental value diminished based on tenant's testimony as to diminished value and pictures of property admitted into evidence).
¶23 The trial court here found "the proper measure for diminution of value is . . . the difference between the lease amount of the property and the fair rental value of a property wherein the parties had contracted that tenants provide water." § 33-1364(A)(2). The court noted that the $600 lease amount included $150 for electricity and $450 for the rental of the property. The only evidence presented on the fair rental value was Sack's statements that the rental value of other properties in the area were "hundreds more" than the $450 he charged Tenants. The court concluded "there was no diminution of value between the rent Tenants were paying and the rental value of the property with [T]enants supplying the water." Sack's testimony, in the absence of any contradictory evidence, was sufficient for the court to determine there was no diminution in value. L & M Inv. Co., 605 P.2d at 1349-50; see also CSA 13-101 Loop, LLC, 233 Ariz. 355, ¶ 25, 312 P.3d at 1128-29.
¶24 Tenants also rely on A.R.S. § 33-1316 for the proposition that "it is not lawful to collect rent for a dwelling that has not been . . . provided essential services as required by § 33-1324(A)." They thus appear to reason that if it was unlawful for Sack to collect rent, the home could have no "fair rental value." Section 33-1316, however, states a lease agreement "may not permit the receipt of rent free of the obligation to comply with" § 33-1324(A). It does not specifically provide for any damages and does not support Tenants' position that the trial court erred by finding no diminution in value. Rather, as the trial court determined, because the lease agreement was silent as to which party was to supply water, the duty fell to Sack. § 33-1324. The remedy for Sack's breach of that duty is expressly governed by § 33-1364(A). Tenants' reliance on § 33-1316 is unavailing.
¶25 Tenants also argue the trial court's calculation "overlooks the damages caused by [Sack's] interference with Tenants' leasehold property rights to use and enjoy a safe and legally habitable rental dwelling." The court heard testimony as to the impact supplying water to the tank themselves caused Tenants and presumably took this into consideration in its determination. Fuentes v. Fuentes, 209 Ariz. 51, ¶ 18, 97 P.3d 876, 880 (App. 2004) (appellate court presumes trial court considered evidence presented before making a decision). Given the evidence that Tenants were already paying below the rental value of other properties in the area, the court could reasonably have concluded there was no further diminution in the value.
¶26 Tenants additionally argue the trial court's basis for determining the fair rental value impermissibly shifted Sack's statutory duty onto Tenants. But the court did not shift the duty; it found that, under the facts of this case, Tenants had not shown any diminution in value, as defined by § 33-1364, as a result of Sack's breach of the duty.
¶27 Tenants next argue the trial court erred by not considering their claim for general damages for pain, suffering, and discomfort resulting from Sack's breach of duty. See Thomas v. Goudreault, 163 Ariz. 159, 166-67, 786 P.2d 1010, 1017-18 (App. 1989). The court, however, did consider Tenants' claim for those damages and expressly declined to award them. And we presume the court considered the evidence presented when making that decision. See Fuentes, 209 Ariz. 51, ¶ 18, 97 P.3d at 880. To the extent Tenants argue the court was required to explicitly discuss the concerns expressed in Thomas, nothing in that case suggests the court must do so, and Tenants have not cited any legal authority requiring the court to do so. Thomas, 163 Ariz. at 166-67, 786 P.2d at 1017-18. Because Tenants' only argument on this issue is that the court declined to consider their claim for general damages at all, not that it erred in its evaluation of the evidence, we do not address this issue further.
Partial Summary Judgment
¶28 In his cross-appeal, Sack argues that the trial court erroneously granted Tenants' partial motion for summary judgment on the issue of whether he had violated § 33-1324(A). Although the court found Sack had violated his statutory duty, it ultimately concluded Tenants were not entitled to any damages because there was no diminution in the fair rental value as discussed above. Accordingly, even were we to find the court erred by concluding Sack breached his duty to supply water, the result would remain the same. We therefore decline to address their argument on this issue. See Freeport McMoRan Corp. v. Langley Eden Farms, LLC, 228 Ariz. 474, ¶ 15, 268 P.3d 1131, 1135 (App. 2011) (court of appeals will "not issue advisory opinions or decide unnecessary issues"); see also Contempo-Tempe Mobile Home Owners Ass'n v. Steinert, 144 Ariz. 227, 229-30, 696 P.2d 1376, 1378-79 (App. 1985) (trial court's ruling on appellant's standing rendered moot after parties stipulated to dismissal with prejudice); Webber v. Smith, 129 Ariz. 495, 498, 632 P.2d 998, 1001 (App. 1981) (counterclaim for value of vehicles moot when party had recovered possession and had not sought damages for loss of use).
Successful Party Designation
¶29 Both Tenants and Sack argue the trial court erred by failing to designate them as the successful party. Below, the court concluded that neither party was the "successful party" under A.R.S. § 12-341 or the relevant lease provisions because both parties were entitled to $1,800 and thus neither would be awarded damages.
¶30 Our resolution of Sack's cross-appeal potentially alters the amount of the judgment credited to Tenants which would increase the amount awarded to Sack. Accordingly, on remand, we vacate the attorney fees and costs award and direct the trial court to exercise its discretion to reconsider that award.
Attorney Fees and Costs on Appeal
¶31 Tenants have requested their attorney fees and costs pursuant to A.R.S. §§ 12-341.01, 33-1377, 33-1365, RPEA 13, and the relevant lease provision. Because they were not successful in their appeal, we deny their request.
¶32 Sack has requested his attorney fees and costs pursuant to various statutes. Ariz. R. Civ. App. P. 21. He has not, however, requested his fees and costs pursuant to the lease provision mandating such an award to the prevailing party. See Berry v. 352 E. Virginia, L.L.C., 228 Ariz. 9, ¶ 17, 261 P.3d 784, 788 (App. 2011) (party's failure to cite contract as basis for fee award in pleadings precludes fee award on that basis).
¶33 As to his request for an award of attorney fees and costs pursuant to A.R.S. § 12-349(A)(1), although many of Tenants' arguments were weak, we cannot say they were "groundless and . . . not made in good faith." § 12-349(F). We therefore decline to award Sack his fees and costs on this basis. Additionally, the judgment below was not entered in either Tenants' or Sack's favor and A.R.S. § 12-342 is thus inapplicable.
¶34 Sack has also requested his attorney fees pursuant to § 12-341.01. Prior to the arbitration award below, Sack sought to settle this matter several times, offering Tenants amounts ranging from $250 to $2,000. After the arbiter entered judgment in favor of Sack for $19,104.86, he offered to forego collection of that judgment in exchange for dismissing the matter with prejudice. Based on his numerous attempts to settle the matter, and ultimate success on appeal, we designate Sack the successful party on appeal pursuant to § 12-341.01. We therefore award him his reasonable attorney fees on appeal upon his compliance with Rule 21. Sack is also entitled to his costs incurred on appeal. § 12-341; see also Henry v. Cook, 189 Ariz. 42, 43, 938 P.2d 91, 92 (App. 1996).
Disposition
¶35 For the foregoing reasons, we vacate the portion of the trial court's order related to unlawful ouster and attorney fees and costs, remand for further proceedings consistent with this decision, and otherwise affirm the judgment.