Case Title: LOWE v ROOT

Citation: 

Docket Number: 

State: montana

Court: Montana Supreme Court

Date: 1975-02-06T00:00:00Z

Document:
No. 12817 I N THE SUPREME COURT O F THE STATE O F M O N T A N A 1974 EMMA L O I d E , P l a i n t i f f and Appellant, -vs - FRED C. ROOT, e t a]-., Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable Jack L. Green, Judge presiding. Counsel of Record: For Appellant : Richard J. Conklin argued, White Sulphur Springs, Montana For Respondents : Garlington, Lohn and Robinson, Missoula, Montana Sherman V. Lohn argued and Gary L. Graham argued, Missoula , Montana Submitted: November 22, 1974 Decided: rrR - .c - @ 13TZ --- Filed: - r b 6 -''k!k . d ..I, Y' M r . Justice Wesley Castles delivered the Opinion of the Court. This i s an appeal by the lessee, E m m a Lowe, from a summary judgment of the d i s t r i c t court, Missoula County, granted i n favor of l e s s o r s , Fred C. Root, Carl E. Dragstedt, Evelyn Dragstedt, Ella R. Clausen, Elmer S. Dragstedt and Elinor R. Dragstedt. On April 9, 1970, E m m a Lowe entered i n t o two nearly i d e n t i c a l leases with the lessors, each involving an undivided one half i n t e r e s t i n the same r e a l property described a s the Belmont Hotel i n the c i t y of Missoula. One lease i d e n t i f i e d Fred Root a s the l e s s o r , the other i d e n t i f i e d the Dragstedts and Ella Clausen a s lessors. Each lease provided t h a t the term of the lease should run up t o and including March 31, 1974. The lessor expressly covenanted f o r the lessee the quiet enjoyment of said term. Lessee agreed to: "* ? * care f o r and maintain the i n t e r i o r of said premises and the e x t e r i o r casings of a l l windows located on said premises; t o permit no unlawful use of said premises; t o make no major a l t e r a t i o n s without permission of the lessor; t o maintain and r e p a i r the heating plant and hot water heater, * * * and t o carry adequate insurance t o protect the lower floor tenants from any water damage." The lessors, f o r t h e i r p a r t , were: "* * * t o keep and maintain the e x t e r i o r walls of said premises and the roof, and t o be responsible f o r the care and r e p a i r of said roof * * yc." A l l p a r t i e s expressly understood and agreed t h a t they had examined the premises and knew the condition thereof. While i n possession of t h e premises lessee E m m a Lowe received a l e t t e r f o r the f i r e marshal, dated January 23, 1973, outlining a number of violations of the Life Safety and E l e c t r i c a l Codes of the c i t y of Missoula and s t a t e of Montana. With the s o l e excep- t i o n of deficiences with respect t o the f i r e escape, a l l deficiencies enumerated i n the l e t t e r involved the i n t e r i o r portion of the building. The l e t t e r referred t o a l e t t e r dated December 23, 1970 which l i s t e d many of the same deficiencies. E m m a Lowe admitted receiving t h i s 1970 l e t t e r . The January 1973 l e t t e r ordered the violations t o be corrected by August 1, 1973. Lessor Root contacted the county attorney and requested him t o i n i t i a t e an action t o condemn the premises from further use a s a hotel, boarding house o r rooming house. O n May 14, 1973, an order of condemnation was f i l e d i n the d i s t r i c t court declaring the premises t o be a f i r e hazard and a public nuisance and ordering a l l p a r t i e s t o t h i s i n s t a n t action t o a l t e r and r e p a i r the building on o r before August 1, 1973. On August 3, 1973, the d i s t r i c t court granted summary judgment, affirming the order of condemnation and directing the s t a t e f i r e marshal t o proceed with i t s enforce- ment. O n June 19, 1973, Lowe f i l e d a complaint i n d i s t r i c t court against Fred Root seeking l o s t p r o f i t s f o r the remainder of the lease term and renewal term. The pertinent grounds of the complaint were: The premises were u n f i t f o r the purpose f o r which they were rented. Defendant Root had f a i l e d t o maintain the premises i n a good and proper fashion so t h a t they could be operated f o r the purpose f o r which the lease was intended. P l a i n t i f f Lowe had demanded t h a t defendant Root perform according t o the terms of the contract t o r e s t o r e the premises t o a good and proper condition f o r the purpose f o r which they were rented and t h a t defendant re- fused. E m m a Lowe had been caused t o become the defendant i n the condemnation action because of the f a i l u r e of defendant t o repair. In Count V I I I of her complaint Lowe alleged i n the following garbled fashion: "* * * That they [the defendants] fraudulently con- cealed informntion concerning the defects on the premises, from the p l a i n t i f f and fraudiientlywithheld the same in- formation, which was known t o them concerning the defective condition of the premises and t h a t said defects were con- cealed unobservable by a common examination of t h e premises, and t h a t the p l a i n t i f f , i n reliance on the assurance of t h e defendants t h a t t h e premises were, i n f a c t , i n f i t and proper order, basis f o r the performing of the business of a h o t e l r e n t a l a s they had been leases f o r , entered i n t o the agree- ment. I t Count IX of the complaint alleged: hat the defendant has w i l f u l l y , wrongfully, unlawfully, and intentionally attempted t o drive the p l a i n t i f f from the f u l l and quiet enjoyment of the premises, under the lease. That the defendant, Fred C. Root, i s the City Attor- ney of the City of Missoula, and was p r i v i t y t o knowledge concerning t h e defects above alleged i n the premises. * * * That said defendant, Fred C. Root, has acted w i l l f u l l y , maliciously, and wrongfully i n an attempt t o vex, harass, annoy and intimidate the p l a i n t i f f gc * *. The defendant has, a s an agent f o r the * * * [Dragstedts and Clausen] and f o r himself used t h e position of h i s o f f i c e t o exert, through the County Attorney's Office, caused t o be f i l e d a complaint alleging t h a t t h e p l a i n t i f f i s g u i l t y of allowing the premises t o f a l l i n t o decay, and further the defendant has, a t h i s specific request and i n t e n t , caused the County through t h e County Attor- ney's o f f i c e , t o issue an Order declaring the premises a f i r e hazard and attempting t o abate t h e same." Three days l a t e r Lowe f i l e d a nearly i d e n t i c a l complaint against the remaining defendants. The only substantial difference i n t h i s second complaint was she alleged t h a t Root acted a s the agent of the other defendants. Subsequent t o the condemnation, Lowe vacated the premises and no further r e n t a l s were paid. The two actions heretofore mentioned, plus an unlawful detainer action f i l e d by defendants against p l a i n t i f f Lowe were consolidated. Defendants moved f o r summary judgment. In i t s judgment and order granting defendants ' motion, the d i s t r i c t court held t h a t under the terns of the leases defendants were not obligated t o make the substantial changes and a l t e r a t i o n s required; t h a t section 42-202, R.C.M. 1947, l i m i t s recourse by a tenant t o vacating t h e premises o r performing repairs up t o the amount of one month's r e n t a l where, a s here, the leased premises a r e f o r human habitation; t h a t punitive damages cannot be awarded without a showing of actual damages; and, t h a t p l a i n t i f f inspected t h e leased premises and knew i t s condition. P l a i n t i f f appeals from the d i s t r i c t court ' s granting defendants' motion f o r summary judgment. Three issues a r e presented f o r consideration on appeal: Was the d i s t r i c t court correct granting summary judgment t o the defendants on the issue of fraud? Was the d i s t r i c t court correct i n i t s determination t h a t sections 42-201 and 42-202, R.C.M. 1947, c o n s t i t u t e a bar t o the claim of p l a i n t i f f ? (3) Was the d i s t r i c t court correct i n i t s determination t h a t p l a i n t i f f ' s complaint did not present a f a c t u a l question of wrongful disruption of possession? W e answer a l l questions i n the affirmative. As t o the issue of fraud, the previously quoted Count V I I I of the complaint alleged fraudulent concealment of c e r t a i n informa- t i o n a s t o defects i n the property p r i o r t o the leases. Although appellant appears t o have abandoned any argument t h a t she was defrauded a s t o the physical condition of t h e premises, we s h a l l discuss t h a t i s s u e i n order t o show t h a t summary judgment i n favor of respondents was proper with respect t o t h a t l e v e l of fraud. In support of her misrepresentation argument, appellant c i t e s Lee v. Stockmen's National Bank, 63 Mont. 262, 284, 207 P. 623. - Lee s e t s f o r t h the elements necessary t o prove a c t u a l fraud. it goes further, however, and s t a t e s : I1 1 When it appears t h a t a party, who claims t o have been deceived t o h i s prejudice,has investigated f o r himself, o r t h a t the means were a t hand t o ascertain the t r u t h * 9 ; * of any representations made t o him, h i s reliance upon such representations made t o him, however f a l s e they may have been, affords no ground of complaint. 1 (Grinrod v. Anglo-American Bond Co., 34 Mont. 169, 85 Pac. 891; Power & Bros. v. Turner, 37 Mont. 521, 97 Pac. 950 ; 26 C. J. 1149. ) I' (Emphasis supplied). I n other words, i f appellant's inspection of the premises revealed or would have revealed the t r u e physical condition of the premises, she would have no r i g h t t o r e l y upon any concealment by respondents with respect t o the physical condition of the premises. Both leases provide t h a t the p a r t i e s "agree t h a t they have examined t h e premises and know the condition thereof1'. Appellant admits she inspected the premises. A review of t h e deficiencies a s c i t e d i n the order of condemnation, reveals t h a t a l l of the alleged defects were open and notorious. A s u p e r f i c i a l inspection'of the building would reveal those deficiencies. Applying the f a c t s of t h i s case t o Lee, and p a r t i c u l a r l y t o the language quoted heretofore, necessitates a finding t h a t an actionable case of fraud a s t o the physical condition of the premises could not be found under the circumstances. The claimed misrepresentation was not argued by appellant Lowe i n the t r i a l court, except i n what may be described a s an oblique manner. The r a t h e r garbled allegation i n Count V I I I of the complaint did not, by i t s e l f , a l l e g e fraud a s t o legal consequences flowing from the physical condition of the premises. Following the granting of summary judgment, appellant f i l e d what she called a motion f o r rehearipg. For the f i r s t time, not i n the motion, but i n the b r i e f f i l e d with the motion, appellant Lowe r a t h e r obliquely s t a t e s t h a t : "* * * the premises were not i n f a c t , f i t f o r the purpose of leasing the same a s a hotel and t h a t the knowledge t h a t the premises were not f i t f o r the purpose f o r which they were leased was a special and peculiar knowledge available t o the defendants through t h e i r agent, and not readily available t o the p l a i n t i f f by mere examination of the premises. That it required an expertise, t h a t the defendant possessed and the p l a i n t i f f did not.* * * . I 1 With t h i s bare reference a t t h i s point i n time, t h e t r i a l court w i l l not be put i n e r r o r . It i s d i f f i c u l t t o lend credence t o the claim of E m m a Lowe of fraudulent misrepresentation i n l i g h t of the information contained i n the exhibit attached t o the order of condemnation. The l e t t e r dated January 1973 t o Lowe r e c i t e s t h a t i n a l e t t e r dated December 23, 1970, many of the discrepancies were pointed out. This much l a t e r , beyond the period of t h e s t a t u t e of limitations, more than an oblique reference i n a b r i e f on a motion f o r rehearing would be necessary t o resurrect a f a c t issue on motion f o r summary judgment . Appellant's second issue i s whether sections 42-201 and 42-202, R.C.M. 1947, c o n s t i t u t e a bar t o the claim of appellant. Those sections provide: "42-201. The lessor of a building intended f o r the occupation of human beings must, i n the absence of an agreement t o the contrary, put it i n t o a condition f i t f o r such occupation, and r e p a i r a l l subsequent dilapid- ations thereof which render it untenantable, except such a s a r e mentioned i n section 42-105." "42-202. I f , within a reasonable time a f t e r notice t o the lessor of dilapidations which he ought t o r e p a i r , he neglects t o do so, the lessee may r e p a i r the same himself, where the costs of such repairs do not require an expendi- t u r e greater than one month's r e n t of the premises, and deduct the expenses of such repairs from the r e n t , or the lessee may vacate the premises. i n which case he s h a l l be dischargeh from further payment of r e n t , o r performance of other conditions. I I Section 42-105, R.C.M. 1947, simply s t a t e s : "The h i r e r of a thing must r e p a i r a l l deteriorations or i n j u r i e s thereto occasioned by h i s ordinary neg- ligence. t I I n Landt v. Schneider, 31 Mont. 15, 17,18, 77 P. 307, the Court said: 11 It i s an elementary principle of law t h a t , i n the absence of a s t a t u t e o r agreement, there i s no implied warranty t h a t leased premises a r e s u i t a b l e f o r the purposes f o r which they a r e demised, o r t h a t the l e s s o r w i l l keep the property i n repair. 11 See a l s o : Kintner v. Harr, 146 Mont. 461, 482, 408 P.2d 487. ~ o n t a n a ' s s t a t u t e s were derived from the California C i v i l Code, sections 1941 and 1942. I n 1881, i n Van Every v. Ogg, 59 Cal. 563, 566, the California Supreme Court well s t a t e d the reasons f o r the two s t a t u t e s : "It i s i n s i s t e d t h a t the section l a s t c i t e d [42-2011, by operation of law, i n s e r t s i n every lease a covenant on the part of the landlord t o repair. But bearing i n mind t h a t a t the common law no such covenant was implied, and reading the two sections together, the i n t e n t seems c l e a r t h a t the obligation of the landlord should be limited by the extent of the privilege conferred upon the tenant; t h a t it i s the duty of the landlord t o repair upon notice, and i f he does not perform t h i s duty he i s t o be compelled t o pay, by deduction from the r e n t , t o the extent of a month's rental---or, a t the option of the tenant, the term be concluded without redress t o the landlord." Then the California Court went on t o point out t h a t prior t o an amendment i n 1874, section 1942 of t h e i r c i v i l code read: ""1f. within a reasonable time a f t e r notice t o t h e l e s i o r of dilapidations which he ought t o r e p a i r , he neglects t o do so, the lessee may r e p a i r the same himself, and deduct the expenses of such r e p a i r s from the r e n t , o r otherwise recover i t from the lessor. I I1 I n 1922, t h i s Court decided Noe v. Cameron, 62 Mont. 527, 532, 205 P. 256, a case almost i d e n t i c a l t o the i n s t a n t appeal. I n - Noe an action was brought t o recover damages alleged t o have been sustained by p l a i n t i f f a s t h e lessee of a h o t e l because of the f a i l u r e of defendant t o make repairs a f t e r notice was given by p l a i n t i f f . This Court, c i t i n g Bush v. Baker, 51 Mont. 326, 152 P. 750, said: "'2 * * These sections [42-201 and 42-2021, a s we a r e told i n the report of the Code Commission, were taken from California, and investigation discloses t h a t they came t o us with a construction upon them which leaves no room f o r doubt. [Cases c i t e d ] . This construction i s t o the e f f e c t t h a t , i f the landlord f a i l s t o r e p a i r a f t e r notice, the tenant may himself r e p a i r , within a c e r t a i n l i m i t , o r move out; but he has no redress i n damages f o r injury t o person o r property consequent upon the landlord's f a i l u r e t o repair. Whether t h i s construction be r i g h t o r n o t , it was presumably adopted with the sections them- selves, it c o n s t i t u t e s a r u l e of property, and the courts of t h i s s t a t e a r e without authority t o a l t e r it. 111 Beyond a doubt a h o t e l i s "a building intended f o r the occupa- t i o n of human beings" and thus within t h e scope of sections 42-201 and 42-202, R.C.M. 1947. Appellant had the choice of making t h e r e p a i r s called f o r by the l e t t e r of the f i r e marshal and deducting the c o s t from the r e n t payments, t o the extent of one month's r e n t , o r t o vacate the premises. She cannot, however, recover damages from respondents f o r t h e i r f a i l u r e t o put the h o t e l i n t o a condi- t i o n f i t f o r the occupation of human beings. This r e s u l t i s not affected by the f a c t t h a t one of the discrepancies alleged i n the l e t t e r of the f i r e marshal was the f i r e escape and t h a t t h e lessors had covenanted "to keep and maintain the e x t e r i o r walls of said premises". Conceding f o r the sake of argument t h a t the f i r e escape was within the d e f i n i t i o n of "exterior walls" and thus the duty of respondents t o r e p a i r i t , such clause i n the lease added nothing t o the statutory duty of the lessors imposed by section 42-201, R.C.M. 1947. Since the language of the lease added nothing t o the s t a t u t o r y duty, the limitation of section 42-202, R.C.M. 1947, remains applicable. W e do not want t o be understood a s holding t h a t the p a r t i e s could never contract i n excess of the s t a t u t o r y duties with respect t o dilapidations which rendered the premises untenantable. W e merely s t a t e t h a t t h i s i s not such a case. I n appellant's t h i r d issue on appeal she a s s e r t s the complaint s t a t e s a cause of action i n t o r t and breach of contract based upon the disturbance of her contract r i g h t t o quiet enjoyment of t h e premises. She intimates t h a t respondents a r e l i a b l e under t h i s theory of action because respondent Root allegedly requested the county attorney t o bring action against her f o r the purpose of ousting her from the leased premises. Her complaint a l s o h i n t s a t an action f o r malicious prosecution and t h a t ~ o o t ' s position as c i t y attorney had some relevance t o her cause of action. Any h i n t of an action f o r malicious prosecution can be quickly disposed of. Elements of t h a t action, among others, a r e : (1) the prior proceeding must have terminated i n favor of t h e present p l a i n t i f f , and (2) there must be an absence of probable cause f o r the i n s t i t u t i o n of such proceeding. 54 C.J.S. 14alicious Prosecution, $4. Here, the condemnation action terminated i n summary judgment i n favor of the s t a t e . Cases c i t e d i n the Annotation, 41 ALR2d 1414, 1442, i l l u s t r a t e the r u l e t h a t where a tenant's enjoyment i s i n t e r f e r e d with i n the exercise of the police power, and i s not caused by the breach of any obligation owed by the landlord t o the tenant, such i n t e r - ference does not c o n s t i t u t e a breach of the covenant f o r quiet enjoyment. Appellant seems t o accept t h i s a s a general r u l e but contends t h a t the affirmative actions of Root i n i n s t i g a t i n g the condemnation action c o n s t i t u t e a breach of the quiet enjoyment covenant. After exhaustive search, we find only one case having similar f a c t s . In Dolman v. United States Trust Co. of N.Y., 134 N.Y.S.2d 508,510, the t r i a l court denied the defendant's motion t o dismiss the complaint, s t a t i n g : "For, i f the p l a i n t i f f can support h i s claim t h a t the defendant by i t s affirmative a c t instigated and f a c i l i t a t e d the condemnation proceedings [eminent domain] and the con- sequent eviction, then i n m y view the p l a i n t i f f has presented a cause of action f o r breach of the covenant of quiet en- j oymen t . 1 I However, on appeal Dolman was reversed, 2 N.Y.2d 110, 138 N.E.2d 784, 157 N.Y.S.2d 537,541, the Court of Appeals held "the tenant was evicted by reason only of the exercise of the sovereign power of eminent domain" and t h a t t h e l e s s o r ' s cooperation with the c i t y did not c o n s t i t u t e a breach of the covenant of quiet enjoyment. We are unwilling to hold that the scope of the covenant of quiet enjoyment precludes a lessor, knowing of violations of ordinances and statutes, from reporting such violations to the authorities. We should not require a lessor to risk damages being assessed against him because he has taken it upon himself to protect the public by reporting the facts to the authorities. Here, the district court in the condemnation action established that the defects on these premises constituted a fire hazard. The public interest is served by allowing any person who has knowledge of a risk to public health of safety, be he lessor or otherwise, to feel free to report such risk to the authorities without fear of having later to respond in damages. The intent of the lessor in reporting such a risk to public health and safety is immaterial, the public interest being paramount. The fact that lessor was the city attorney is likewise immaterial, there being no privity between the city and county attorneys. Root was in the position of any other private lessor. Having examined the issues raised and finding no merit, we affirm the judgment. We Concur: Justices / Hon. Gordon Bennett, sitting for Chief Justice James T. Harrison.