Opinion ID: 1226769
Heading Depth: 1
Heading Rank: 2

Heading: consumer sales practices act

Text: The Utah Consumer Sales Practices Act (UCSPA), Utah Code Ann. §§ 13-11-1 to -23, prohibits deceptive or unconscionable acts or practices by a supplier in connection with a consumer transaction. A consumer transaction is broadly defined as a sale, lease, assignment, award by chance, or other written or oral transfer or disposition of goods, services, or other property, both tangible and intangible (except securities and insurance), to a person for primarily personal, family, or household purposes... . It includes any offer or solicitation, any agreement, any performance of an agreement with respect to any of these transfers or dispositions. Id. at § 13-11-3(2). In addition to excepting securities and insurance in the definition of consumer transaction, section 13-11-22 specifically excepts a number of other acts, practices, persons, and claims from the application of the UCSPA. [15] The Act does not expressly include or exclude residential leases, nor was there any indication in the floor debate prior to the statute's enactment whether the legislature intended to include landlord/tenant transactions within its application. The UCSPA was modeled after the Uniform Consumer Sales Practices Act, which was drafted by the National Conference of Commissioners on Uniform State Laws in 1971 and approved by the American Bar Association in 1972. The Uniform Consumer Sales Practices Act is the most recent of the model consumer protection statutes, and its application is more narrow than some of the others. D. Pridgen, Consumer Protection & the Law § 3.02(2)(e) (1989). It has been adopted in only three states: Utah, Kansas, and Ohio. Id. There is great diversity in the language, scope, degree of enforcement, and judicial interpretation of the various state consumer protection laws. Most relevant here are the differences in the statutory language used to define what is considered to be a commercial transaction or trade or commerce subject to any given law. The Uniform Consumer Sales Practices Act states that it applies to the sale, lease, assignment, award by chance, or other disposition of an item of goods, a service, or an intangible. Unif. Consumer Sales Practices Act § 2(1) (emphasis added). Although the language of the model act does not specifically except transactions in real property, the comment to section 2(1) states, On the assumption that land transactions frequently are, and should be, regulated by specialized legislation, they are excluded altogether from the scope of the model act. The Utah version of the model act contains no such comment. Moreover, the language of the Utah statute is different, stating that it applies to goods, services, or other property both tangible and intangible. Utah Code Ann. § 13-11-3(2) (emphasis added). As a general rule, tangible property can be either real or personal. See 73 C.J.S. Property § 15 (1983). The Utah Legislature's addition of the word tangible to the language of the definition of consumer transaction is consistent with the conclusion that the Utah act was meant to apply to residential leases and other land transactions. The UCSPA states that it should be construed liberally to promote a number of policies. Utah Code Ann. § 13-11-2. Those policies include making state regulation of consumer sales practices consistent with the policies of the Federal Trade Commission Act, id. § 13-11-2(4), and creating uniformity in the law between Utah and the other states enacting similar consumer protection laws. Id. § 13-11-2(5). In order to determine the scope of the UCSPA, and specifically, whether it applies to landlord/tenant transactions, therefore, it is instructive to look at the law as it has developed in other jurisdictions. Defendant cites a number of cases from other states and the federal courts which apply consumer protection laws to residential leases. [16] Most of the consumer protection statutes interpreted in those cases are modeled after the Uniform Trade Practices and Consumer Protection Law, which in turn was patterned after the Federal Trade Commission Act (the F.T.C. Act), 15 U.S.C. §§ 41 to 77. See D. Pridgen, Consumer Protection & the Law § 3.02[2][c], at 3-6 (1989). That model law and the F.T.C. Act, however, differ from the Uniform Consumer Sales Practices Act and the UCSPA. The statutory definition of trade and commerce subject to the former is much broader, expressly including the sale of real property and/or broadly prohibiting all unfair methods of competition and unfair or deceptive acts or practices. See id. This is something the Utah statute does not do. Notwithstanding this difference, this author and Justice Zimmerman think the Utah consumer protection statute applies to residential leases. The UCSPA specifically includes the lease of tangible and intangible property rather than being limited to sales transactions, as the broader acts frequently are. Moreover, that the UCSPA does not expressly mention the leasing of real property argues in favor of, rather than against, its application; the legislature has mandated a liberal construction of the Act, and it was explicit in excepting other transactions from its jurisdiction. See Utah Code Ann. §§ 13-11-3(2), -22. The contemporary view of landlord/tenant relations and the public policy behind the consumer protection laws also support the applicability of the UCSPA to residential leasing. Expressing the view adopted by many contemporary authorities, this court wrote: When American city dwellers, both rich and poor, seek shelter today, they seek a well known package of goods and services  a package which includes not merely walls and ceilings, but also adequate heat, light and ventilation, serviceable plumbing facilities, secure windows and doors, proper sanitation, and proper maintenance. Williams v. Melby, 699 P.2d 723, 727 (Utah 1985) (quoting Javins v. First Nat'l Realty, 428 F.2d 1071, 1074 (D.C. Cir.), cert. denied, 400 U.S. 925, 91 S.Ct. 186, 27 L.Ed.2d 185 (1970) (footnote omitted)). Functionally, the tenant, much like a buyer of a used car, is a consumer of housing. See Commonwealth v. Monumental Properties Inc., 459 Pa. 450, 329 A.2d 812, 820-21 (1974), and cases cited therein; Backman, The Tenant as a Consumer? A Comparison of Developments in Consumer Law and in Landlord/Tenant Law, 33 Okla.L.Rev. 1 (1980). This court has recognized the similarity between residential leasing and more traditional commercial transactions, stating: [M]odern landlord-tenant relationships, while steeped in the tradition of ancient property law, have taken on substantive characteristics so similar to commercial transactions that certain of the legal principles developed in the law of contracts in the context of commercial transactions are now appropriately applied to leases. Reid v. Mutual of Omaha Ins. Co., 776 P.2d 896, 902 n. 3 (Utah 1989). One of the stated purposes of the UCSPA is to protect consumers from suppliers who commit deceptive and unconscionable sales practices. Utah Code Ann. § 13-11-2(2). The legislative intent behind the model consumer protection laws was to balance the unequal bargaining positions between supplier and consumer. The tenant is entitled to protection under these remedial laws as much as any other consumer. In view of (1) the legislature's mandate to construe the UCSPA liberally, (2) the stated purpose of keeping Utah law consistent with the F.T.C. Act and the consumer protection laws of other states, and (3) the absence of any language or other expression of legislative intent to the contrary, this author and Justice Zimmerman would hold that the renting of residential housing is a consumer transaction within the meaning of the UCSPA.
Section 13-11-4(2) of the UCSPA enumerates several acts which are considered deceptive per se. Under that section, the tenant asserts that the landlord engaged in a deceptive act by indicating that the premises were of a particular standard, quality, grade, style, or model when they were not. As a conclusion of law, the trial court found that the evidence would not warrant a finding of any deceptive act or practice on the part of [the landlord], as contemplated by the Consumer Sales Practices Act. The UCSPA requires that the supplier act with intent to deceive. Utah Code Ann. § 13-11-4(2). Implicit in a legal conclusion that there is or is not a deceptive practice or act under the UCSPA is a factual finding that the requisite intent to deceive was either present or absent. The determination of whether a person had the intent is one of fact for the lower court. See Fitzgerald v. Corbett, 793 P.2d 356, 358 (Utah 1990); Hall v. Warren, 632 P.2d 848, 851 (Utah 1981). A finding of fact can be set aside by this court on appeal only if it is found to be clearly erroneous. Utah R.Civ.P. 52(a). A finding is clearly erroneous only if it is against the great weight of evidence or if the court is otherwise definitely and firmly convinced that a mistake has been made. Bountiful v. Riley, 784 P.2d 1174, 1175 (Utah 1989). To challenge a finding of fact, the challenger must marshal all the evidence supporting the finding and then demonstrate that the evidence is legally insufficient to support the finding. See In re Estate of Bartell, 776 P.2d 885, 886 (Utah 1989); Doelle v. Bradley, 784 P.2d 1176, 1178 (Utah 1989). In this case, the tenant has not attempted to marshal the evidence or demonstrate its legal insufficiency. Indeed, there does not appear to be any evidence that the landlord knew of the problem with the sewer connection when he rented the premises. There is therefore no reason for us to disturb the trial court's findings. See id. at 1178-79; Ashton v. Ashton, 733 P.2d 147, 150 (Utah 1987). We would let stand the trial court's conclusion that the landlord did not engage in a deceptive act under the UCSPA. The tenant also asserts that the landlord's actions were unconscionable under section 13-11-5 of the UCSPA. [17] Under the statute, unconscionability does not require proof of specific intent but can be found by considering circumstances which the supplier knew or had reason to know. Utah Code Ann. § 13-11-5(3) (emphasis added). The determination of unconscionability is a question of law. Utah Code Ann. § 13-11-5(2). This court is therefore free to review the record and make its own conclusions as to this determination. See State ex rel. Div. Consumer Protection v. Rio Vista Oil, Ltd., 786 P.2d 1343, 1347 (Utah 1990); Henretty v. Manti City Corp., 791 P.2d 506, 510 (Utah 1990). In Resource Management Co. v. Weston Ranch and Livestock Co., 706 P.2d 1028 (Utah 1985), we discussed the doctrine of unconscionability at length. The discussion was based on standards articulated in the Uniform Commercial Code, see U.C.C. § 2-302, comment 1, and on contract law in general. The principles there discussed are, for the most part, applicable here. In Resource Management, the court distinguished substantive and procedural unconscionability. Procedural unconscionability focuses on the manner in which the contract was negotiated and the circumstances of the parties, 706 P.2d at 1041, and can be characterized as the absence of meaningful choice and a gross inequality of bargaining power. Id. at 1042 (quoting Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C. Cir.1965)). Substantive unconscionability examines the relative fairness of the obligations assumed; it requires terms so one-sided as to oppress or unfairly surprise an innocent party, Resource Management, 706 P.2d at 1041 (citing Bekins Bar V Ranch v. Huth, 664 P.2d 455, 462 (Utah 1983)); Bill Stremmel Motors, Inc. v. IDS Leasing Corp., 89 Nev. 414, 514 P.2d 654, 657 (1973), or an overall imbalance in the obligations and rights imposed by the bargain, Bekins Bar V Ranch v. Huth, 664 P.2d at 462. Under contract law, unconscionability is determined as of the time the parties enter into the contract. See Resource Management, 706 P.2d at 1043. In contrast, under the UCSPA, an unconscionable act or practice may occur before, during or after a consumer transaction. In this case, therefore, consideration can be given to the landlord's actions during the course of the tenancy, as well as to his act of renting the premises initially. As discussed above, there is no evidence that the landlord knew when he rented the premises that there was a problem with the sewer connection, nor is there any indication that he had reason to know of the problem at that time. Further, although the water was not turned on, the tenant had the opportunity to inspect the premises before she rented the house. By her own testimony, she did not go down into the basement when she first looked at the house. Thus, at the time the lease was signed, the tenant had a meaningful choice in whether or not to rent the house, and the bargaining power of the parties was relatively equal since both had the same opportunity to inspect the premises. As a matter of law, the landlord did not act unconscionably in renting the premises to the tenant initially. The relative positions of the parties changed dramatically, however, once the tenant moved into the house, discovered the problems, and informed the landlord. According to the housing inspector's testimony, by December 1988 the premises exhibited `dozens' of violations of the Utah Housing Code which posed substantial dangers to the health and safety of the occupants, including the presence of raw sewage on the sidewalks, and stagnant water in the basement with a foul odor. The landlord's repeated failure to repair the sewage problem after he had knowledge of its existence was unconscionable. At that point, the tenant's only choice was either living without hot water, with foul odors permeating her residence and standing water and raw sewage in the basement, or moving out of the house and incurring the substantial expenditure of time, energy, and money that relocation requires. This amounted to no meaningful choice at all. See Resource Management, 706 P.2d at 1042. Substantively, from that point until the premises were ordered vacated, the bargain became one with terms so one-sided as to oppress the tenant, id. at 1041, creating an overall imbalance in the obligations and rights imposed by the bargain. Bekins Bar V Ranch v. Huth, 664 P.2d at 462. The division investigated the premises twice during December 1988. The tenant testified that she called the housing inspectors once, presumably in November or early December. The evidence indicates that it was the landlord who called the inspectors the second time. The purpose of that second call, by the landlord's own admission, was to have the house condemned so [the tenant] would move out. The landlord's efforts were successful; the second inspection resulted in a notice ordering vacation of the premises until the life-safety threats were corrected. Those threats included the lack of connection to the sewer system, the presence of stagnant water in the basement, and other critical problems. Id. The landlord's direct admission that he had the house effectively condemned for the purpose of evicting the tenant rather than repairing the sewer system is shocking. Tenants in Utah have a right to be evicted only by judicial process. See Utah Code Ann. § 78-36-12. The landlord's actions violated state policy disfavoring selfhelp evictions. He also abused the building inspection process. His acts were unconscionable under the UCSPA. Once the tenant had moved into the house and discovered the unsafe and unsanitary conditions, her only choice was to live with those conditions or incur the burdens of moving. That is a result which no decent, fair-minded person would view... without being possessed of a profound sense of injustice. Resource Management, 706 P.2d at 1041 (quoting Carlson v. Hamilton, 8 Utah 2d 272, 332 P.2d 989, 991 (1958)). Thus, the author and Justice Zimmerman would hold that the landlord's conduct was unconscionable under the UCSPA. A consumer has an express statutory right to bring an action under the UCSPA even if he seeks or is entitled to damages or otherwise has an adequate remedy at law. Utah Code Ann. § 13-11-19(1). The tenant in this case should not be precluded from bringing an action under the statute and under the common law warranty of habitability.