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LANDLORDS: HOW NOT TO FIX A ROOF AND OTHER CAUTIONARY TALES.

Posted By Cliff Tuttle | August 20, 2017

No. 1,349

NEXUS REAL ESTATE, LLC v. ERICKSON, 1217 Pa. Super 180 (2017)

Just before his lease was about to renew, a two-by-two portion of the ceiling fell into the bath tub of John Erickson’s apartment.  He called his landlord and learned that the building had been sold. So the information was relayed to a new landlord, who relayed it to the new management company, Lexus.

A few weeks later, On December 12, 2014, Lexus contacted all of the tenants in the building with the news that they must sign new leases or vacate by December 31, 2014. To make matters worse, the heat was working poorly. Mr. Erickson testified that he wanted to see the roof and heating repaired before he signed a lease, but under the circumstances, he had to accept an oral promise that the repair would be made.

The heat went out completely in February and Mr. Erickson move out for a while, but returned at the end of the  month with a space heater and sleeping bag. Although he continued to request the heat and ceiling repairs, nothing was done.

Then, in June, the air conditioning failed.  Despite reassurances, no repairs occurred and the apartment was experiencing daytime temperatures in the nineties. Despite promises to address the problem, nothing was done.

On August 5, Erickson emailed Nexus to complain that it was raining in the bathroom through a gaping hole in the ceiling, there was visible mold and he was coughing.

Although promises continued to be made, the response was, putting it politely, cosmetic..  A drop ceiling had been installed, but the hole was still there.  He left the apartment for two months but returned to find the conditions much worse.

When he returned on December 6, 2015, the ceiling tiles had fallen and what remained of the plaster ceiling was hanging. He captured the condition in photographs,” the opinion stated.

“Finally, on December 11, Nexus arranged for someone to rip out the ceiling to the bare rafters and scrub it with bleach to ameliorate the mold. Shortly before this occurred, Mr. Erickson had gone to the Department of Permits, Licenses and Inspections, and the agency had inspected his apartment on December 9, 2015, and filed a report. Nexus employees also told Mr. Erickson that the Allegheny Health Department had contacted them about the possibility of mold in his bathroom. Mr. Erickson believed that his complaints to city agencies prompted Nexus to hire the mold remediation company and repair the ceiling.

Nonetheless, the water problem persisted. Plastic had been stapled into the rafters and was collecting water when it rained. Instead of fixing the roof, Nexus placed makeshift gutters of corrugated plastic in the rafters to collect the rainwater dripping through the roof and channel it to the outside. It was not until December 17, 2015, that Nexus dry walled Mr. Erickson’s bathroom ceiling. By that time, he had already made plans to vacate the premises.”

If the foregoing conditions had been the only deficiencies Mr. Erickson had been forced to suffer, he would have been entitled to a substantial  judgment.  According to the opinion:

“At the non-jury trial, Mr. Erickson also complained that when he signed the new lease, Ms. Beynon made no mention of major outdoor construction. He offered the testimony of Rick Beadling, another tenant, who confirmed that Ms. Beynon told him only that there would be landscaping work on the premises. Mr. Erickson introduced photographs that depicted scaffolding covering the front of the building starting in January 2015, plywood sheets over trenches in lieu of sidewalks, and no lighting or railings. He described the condition as treacherous. Although Nexus recommended that the tenants use alternate entrances, Mr. Erickson testified that those routes were impassable especially at night. The problems with safe ingress and egress remained throughout the summer of 2015, and it was not until October that proper lighting was installed.

In addition to these issues, Mr. Erickson complained that construction noise commenced at 6:30 a.m., and, as the project neared conclusion, persisted seven days per week. Water service to the apartments was shut off at least twenty-five times, a fact that was confirmed by Mr. Beadling. In October 2015, Mr. Erickson began paying his rent into an escrow account.”

Two separate suits, Landlord’s claim for $1,750.00 in unpaid rent, withheld during the last months of the lease term and Tenant’s claim for return of $9,750.00 in rent actually paid, alleging breach of the warranty of habitability and violation of the Unfair Trade Practices Consumer Protection Law (UTPCPL). The cases were consolidated and heard by Allegheny County Common Pleas Judge Alan Hertzberg.

Judge Hertzberg entered an award in favor of the Tenant on the Landlord’s claim for rent and awarded the full amount of the rent paid, tripling it under the UTPCPL.  Following post trial motions, the total award was adjusted to $23,150.00.

On appeal, the Landlord alleged that the Court committed an error of law in awarding triple damages under UTPCPL where the evidence does not support such a finding. Judge Mary Jane Bowes, of Pittsburgh delivered the decision of the panel. The decision of the Supreme Court in Schwartz v Rockey, 932 A.2d 885 (2007) holding that exemplary damages may be entered under UTPCPL without meeting the common law criteria for fraud or punitive damages.

“Landlord acknowledges that the UTPCPL applies to landlord-tenant cases, but maintains that treble damages awards are reserved only for the most egregious cases where the landlord’s conduct was deceitful and illegal. In support of its position, Landlord directs us to our unpublished, non-precedential memorandum in Pierre v. MP Cloverly Partners, LP, 133 A.3d 64

(Pa.Super. 2015), in contravention of this Court’s rules.[1] As additional examples of the type of egregious conduct that merited treble damages, Landlord cites Pikunse v. Kopchinski, 631 A.2d 1049 (Pa.Super. 1993), where the landlord discarded furniture and appliances in retaliation for the tenant’s failure to pay rent, and Wallace v. Pastore, 742 A.2d 1092 (Pa.Super. 1999), where the landlord withheld the tenant’s security deposit and misrepresented the existence and extent of property damage.

Furthermore, Landlord argues that the record reveals no deceptiveness on its part. It maintains that its representatives met with Mr. Erickson, inspected his apartment, explained the process for submitting maintenance requests, and provided the opportunity for him to note in the new lease that certain conditions required attention. He did not avail himself of that opportunity. According to Landlord, Mr. Erickson’s periodic requests for maintenance were acted upon after he followed the proper procedures and repaired, and treble damages were not warranted.

Mr. Erickson counters that the trial court properly applied the standard enunciated in Schwartz, supra, and rejected Landlord’s claim that egregious conduct was required to support an award of treble damages. He maintains that the trial court heeded the direction of the Supreme Court to “focus on the presence of intentional or reckless, wrongful conduct.” Id. at 898. Furthermore, he points to a record replete with instances of Landlord’s deception and false promises.

In Schwartz, our Supreme Court discussed the role of the court in assessing treble damages pursuant to the UTPCPL: [T]he statute, on its plain terms, does not provide any standard pursuant to which a trial court may award treble damages. In construing its terms, we find particularly relevant the principles of statutory construction authorizing consideration of the occasion and necessity for the statute, the mischief to be remedied, the object to be attained, and the consequences of a particular interpretation. See 1 Pa.C.S. § 1921(c).

Schwartz, supra at 898. The Court recognized that the UTPCPL is a consumer protection statute, in which the General Assembly has employed broad phrasing that our Supreme Court has instructed us to construe liberally. Recognizing that the UTPCPL’s treble damages provision had “both punitive and remedial aspects,” the Schwartz Court concluded that the trial court’s discretion “should not be closely constrained by the common-law requirements associated with the award of punitive damages.” Id. see also Meyer v. Cmty. College of Beaver County, 93 A.3d 806, 815 (Pa. 2014) (noting the hybrid nature of treble damages with both punitive and remedial aspects). Nonetheless, it cautioned that the trial court’s discretion was not unfettered. The Supreme Court concluded that trial courts “should focus on the presence of intentional or reckless, wrongful conduct, as to which an award of treble damages would be consistent with, and in furtherance of, the remedial purposes of the UTPCPL.” Schwartz, supra at 897-898. Appellate courts should review such decisions “for rationality, akin to appellate review of the discretionary aspect of equitable awards.” Id. at 898; Dibish v. Ameriprise Fin., Inc., 134 A.3d 1079, 1091 (Pa.Super. 2016).

The trial court applied the correct legal standard in making its determination. It found “multiple instances of intentional or

reckless, wrongful conduct by Nexus.”[2] Trial Court Opinion, 8/29/16, at 2. The court noted Nexus’s December 2014 assurances that defects in Mr. Erickson’s ceiling and heat would be remedied immediately. N.T., 5/5/16, at 14. Despite repeated complaints, the heat and air conditioning in Mr. Erickson’s apartment were non-functioning until September 10, 2015. Thus, Mr. Erickson endured a winter without heat and a summer without air conditioning. The trial court pointed to the report authored by the City of Pittsburgh Department of Permits, Licenses and Inspections indicating that the large hole in the ceiling of the bathroom had not been properly repaired even after Mr. Erickson vacated the unit. Exhibit O.

The court credited Mr. Erickson’s testimony that when he contacted Nexus about the ceiling and the heat and air conditioning, they promised to take care of it or send it to maintenance. N.T., 5/5/16, at 15-16. Copies of email correspondence with Nexus confirmed that the latter promised that the repairs would be made “today” or “as soon as possible,” which did not occur. The court found credible Mr. Erickson’s testimony recounting his conversations with Nexus Vice President Craig Falk in August 2015, and expressly found incredible Nexus’s representation that Mr. Erickson did not report the problem with the heat until June 2015. The court concluded that Nexus could have devoted the necessary resources to repair Mr. Erickson’s ceiling, heat, and air conditioning by January or February 2015, but “deliberately delayed both in responding . . . and in devoting the resources necessary for the repairs.” Trial Court Opinion, 8/29/16, at 5. Nexus’s false promises and inaction was “cruel and callous behavior,” and the type of intentional or reckless, wrongful conduct that warranted treble damages under Schwartz.

There is no legal support for Landlord’s contention that the trial court should have applied some amorphous egregiousness measure in determining whether to award treble damages. The trial court applied the proper legal standard. Furthermore, we have no basis to disturb the court’s credibility determinations. In short, the record supplies a firm rational basis for the trial court’s finding that the harm to Mr. Erickson was caused by Landlord’s intentionally wrongful and deceptive conduct that supported an award of treble damages.”

The lesson for landlords and their counsel is obvious.  Don’t expect to neglect important repairs and avoid serious consequences.  The facts in this case are so compelling, it is impossible to understand how even the most insensitive dull-headed landlord could fail to anticipate the inevitable outcome.

Congratulations are in order to our Allegheny County colleague, Katheryn Wakefield for an important win in a just cause.

CLT

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CLIFF TUTTLE has been a Pennsylvania lawyer for over 40 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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