Jesse v. Lindsley ( 2008 )

J. JONES, Justice.

While walking in the rain to another apartment in her complex, Yvonne Jesse decided to walk in the planting area in order to avoid a considerable amount of water covering the driveway. As she was walking, Jesse stepped in a sinkhole and fell, sustaining multiple injuries. Jesse sued her landlord, Ted Lindsley, for failing to maintain the premises in a safe condition. Lindsley moved for summary judgment, alleging that an exculpatory clause in the lease absolved him from liability for Jesse’s injuries. The district court agreed and granted summary judgment in favor of Lindsley. Jesse appealed to this Court. We vacate the summary judgment and remand for further proceedings.

I.

The facts of this case are largely undisputed. Ted Lindsley owns Vista Valley Apartments in Grangeville, Idaho. Yvonne Jesse rented an apartment from Lindsley in 2000. The apartment lease contains an exculpatory clause, which provides:

That the owner shall not be liable for damages due to either injuries or accidents caused by slipping, falling or from any other sources that occur either in the apartment building, the outside area of the apartment building, or on the outside premises of the lot or land, paving or sidewalks where the apartment building is located or from any act of God that either directly or indirectly may cause bodily harm of any nature.

On May 8, 2005, Jesse injured herself when she fell in a sinkhole while walking in the planting area adjacent to her mother’s apartment, which was in the same complex. It was raining heavily, and Jesse walked in the planting area beside the driveway in order to avoid a “considerable amount” of water which ran down the driveway.¹ Jesse had previously walked in the planting area when it was raining, and had informed Lindsley about the hole there several times.

Jesse sued Lindsley on a negligence theory, alleging he should have known the sinkhole was a dangerous condition that presented an unreasonable risk to tenants and that he should have remedied this prior to her fall. Lindsley moved for summary judgment on the grounds that the exculpatory clause relieved him from all liability. The district court granted summary judgment for Lindsley on that basis, stating:

Today in Idaho a landlord is strictly liable for breaches of the statutory warranty of habitability [under I.C. § 6-320] and he must exercise due care regarding all other aspects of the rented or leased premises. Competing with those fairly straight-forward notions is the right of Idahoans to contract away their duties and liability for their own negligence.

Jesse appealed to this Court, contending she was entitled to pursue a claim under I.C. § 6-320 and that, in any event, the exculpatory clause was against public policy and unenforceable.

II.

In this case, we address (1) whether Jesse can bring a claim under I.C. § 6-320 and (2) whether an exculpatory clause purporting to absolve a landlord from liability for accidental injuries sustained by the tenant is in contravention of public policy and unenforceable.

A.

Standard of Review

On appeal from the grant of a motion for summary judgment, this Court applies the same standard used by the district court originally ruling on the motion. Carnell v. Barker Mgmt., Inc., 137 Idaho 322, 326, 48 P.3d 651, 655 (2002). Summary judgment is proper “if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Id. at 326-27, 48 P.3d at 655-56 (citing Idaho R. Civ. P. 56(c)). All disputed facts are to be construed liberally in favor of the nonmoving party, and all reasonable inferences that can be drawn from the record are to be drawn in favor of the non-moving party. Id. at 327, 48 P.3d at 656. If there is no genuine issue of material fact, only a question of law remains, over which this Court exercises free review. Infanger v. City of Salmon, 137 Idaho 45, 47, 44 P.3d 1100, 1102 (2002). The parties do not dispute the pertinent facts here, so we are presented with questions of law.

B.

Jesse May Not Invoke I.C. § 6-320

Jesse contends Lindsley violated I.C. § 6-320, Idaho’s statutory version of the implied warranty of habitability.² Silver Creek Computers v. Petra, Inc., 136 Idaho 879, 882, 42 P.3d 672, 675 (2002). The statute reads, in part pertinent here, “A tenant may file an action against a landlord for damages and specific performance for ... Maintaining the premises in a manner hazardous to the health or safety of the tenant ...” I.C. § 6-320(a)(3). The district court found that Jesse’s alleged fall was not within I.C. § 6-320 because the planting area was not intended to be a means of access to her apartment. Jesse alleges the district court erred because it failed to recognize that Jesse was “compelled” to walk in the planting area due to the heavy rain and water that had accumulated on the driveway. In addition, Jesse told Lindsley about the sinkhole numerous times. Since Lindsley knew prior to this accident that Jesse had to walk across the planting area because of excessive water, and failed to fix the sinkhole, she contends Lindsley maintained the premises in a hazardous condition, under I.C. § 6-320. Lindsley argues I.C. § 6-320 is not applicable here because the defect Jesse complains of did not prevent her from using the dwelling for its intended purpose of habitation, citing to cases applying the common law warranty of habitability.

I.C. § 6-320 is a strict liability statute. Silver Creek Computers, 136 Idaho at 883, 42 P.3d at 676. A tenant need not prove negligence to obtain relief under I.C. § 6-320. Id. Thus, Jesse could pursue her claim under this statute, even without proving Lindsley was negligent in failing to repair the sinkhole. However, I.C. § 6 — 320(d) expressly provides: “Before a tenant shall have standing to file an action under this section, he must give his landlord three (3) days written notice, listing each failure or breach upon which his action will be premised and written demand requiring performance or cure.” Although Jesse did inform Lindsley of the defective condition a number of times, there is no allegation of her having given written notice. Thus, Jesse lacks standing to bring a claim under the statute.

C.

The Exculpatory Clause Is Overly Broad and Unenforceable

The district court found the planting area was not within the scope of the statutory warranty of habitability because the landlord did not intend that area to be a means of access to the apartment. In addition, the lease provision specifically negated liability for any personal injury that occurred on the premises. Given the expanse of the exculpatory language and the finding that the planting area was beyond the ambit of the habitability covenant, the district court concluded Lindsley successfully immunized himself from liability.

Jesse contends the district court erred when it held the exculpatory clause was enforceable because the clause violates public policy. To support this contention, Jesse relies on a landlord’s common law duty to exercise reasonable care in light of all the circumstances and I.C. § 6-320. Jesse claims the clause in the rental agreement violates Idaho’s public policy by eliminating the landlord’s duty to exercise reasonable care. As such, the clause should not be enforced. Lindsley contends that the clause is enforceable because parties are free to contract with one another, as they did here in agreeing to the clause. Further, he contends the accident at issue here would not fall within I.C. § 6-320, and that there is no legitimate argument that public policy gives tenants greater protection than the Legislature codified.

Before considering these arguments, it would be well to consider the duty a landlord owes to a residential tenant, including the role of Section 6-320. This Court initially discussed that section in Worden v. Ordway, 105 Idaho 719, 672 P.2d 1049 (1983), a case involving a landlord’s obligation to repair leased premises. There, the Court declined to adopt a common law implied warranty of habitability, based on the Legislature’s enactment of Section 6-320. Id. at 723, 672 P.2d at 1053. In declining to adopt a rule requiring landlords to keep residential premises in a habitable state of repair, the Court stated:

The Idaho legislature has already acted in this area and enacted a statutory version of the implied warranty of habitability theory. I.C. § 6-320. This Court should refrain from changing or expanding a common law rule, where the legislature has already acted in the same area.

Id. The Court reiterated that Section 6-320 constituted a statutory version of the implied warranty of habitability in Stephens v. Stearns, 106 Idaho 249, 678 P.2d 41 (1984). There, the Court considered the landlord’s duty where a tenant was injured when falling in a stairway that provided access to her apartment. The Court noted that under the common law, a landlord was generally not liable to the tenant for any damage resulting from dangerous conditions existing at the time of the leasing. Id. at 257, 678 P.2d at 49. However, the Court stated, “[W]e today decide to leave the common-law rule and its exceptions behind, and we adopt the rule that a landlord is under a duty to exercise reasonable care in light of all the circumstances.” Id. at 258, 678 P.2d at 50. This holding was footnoted: “Our embracement of this rule is further supported by our legislature’s enactment of a statutory version of the implied warranty of habitability, I.C. § 6-320.” Id., at 258 n. 3, 678 P.2d at 50 n. 3. (citing Worden, 105 Idaho at 719, 672 P.2d at 1049).

The Court again visited the issue in Stevens v. Fleming, 116 Idaho 523, 777 P.2d 1196 (1989), wherein the surviving daughters of a deceased residential tenant were seeking damages from the landlord for their decedent’s death in an apartment fire. The Court stated:

A landlord is required to exercise reasonable care to his tenants in light of all the circumstances. Stephens v. Stearns ... In adopting the reasonable care standard for landlords in Steams ... the Idaho Supreme Court noted by way of footnote that its holding was supported by a statutory version of the implied warranty of habitability, I.C. § 6-320. When applicable, specific statutory provisions such as the Uniform Fire Code may prove useful in delineating minimum standards which are binding upon every owner of a rented premises. Such on point code provisions provide a ready measure of the base standard of care and failure to meet such standards may be negligence per se if the statutes or ordinances were designed to prevent the type of harm which occurred.

Id. at 525-26, 777 P.2d at 1198-99.

Thus, the rule is that a landlord must exercise reasonable care under the circumstances for the protection of his residential tenant. This includes the duty under I.C. § 6-320 to maintain the premises in a manner that is not hazardous to the health or safety of the tenant. We now turn to the application of the exculpatory clause.

Freedom of contract is a fundamental concept underlying the law of contracts. Rawlings v. Layne & Bowler Pump Co., 93 Idaho 496, 499, 465 P.2d 107, 110 (1970). A contracting party may absolve himself from certain duties and liabilities under the contract, subject to certain limitations. Anderson & Nafziger v. G.T. Newcomb, Inc., 100 Idaho 175, 178, 595 P.2d 709, 712 (1979). However, courts look with disfavor on such attempts to avoid liability and construe such provisions strictly against the person relying on them, especially when that person is the preparer of the document. Id. Clauses which exclude liability must speak clearly and directly to the particular conduct of the defendant which caused the harm at issue. Id. In this case, Lindsley, the landlord, drafted the exculpatory clause. This Court will thus construe the clause strictly against Lindsley, and the clause must speak clearly and directly to the conduct to be immunized from liability.

The general rule sustaining agreements exempting a party from liability for negligence is subject to two exceptions: “(1) one party is at an obvious disadvantage in bargaining power; or (2) a public duty is involved (public utility companies, common carriers).”³ Lee v. Sun Valley Co., 107 Idaho 976, 978, 695 P.2d 361, 363 (1984) (quoting Rawlings, 93 Idaho at 499-500, 465 P.2d at 110-11). “Unless in circumstances affronting public policy, it is no part of the business of the courts to decline to give effect to contracts which parties have freely and deliberately made.” United States ex rel. and for Benefit of Admin’r of Fed. Housing Admin, v. Troy-Parisian, Inc., 115 F.2d 224, 226 (9th Cir.1940), quoted in Rawlings, 93 Idaho at 500, 465 P.2d at 111. In Lee, the Court named utilities and common carriers as obvious examples of parties owing a public duty, but we also noted there may be others who owe a public duty in Idaho. Lee, 107 Idaho at 978, 695 P.2d at 363. “The idea of a public duty is closely related to the idea of public policy and it is within the domain of the legislature, elected by the public, to determine such duties and policies.” Id. Whether a contract violates public policy is a question of law for the court to determine from all the facts and circumstances of each case. Bakker v. Thunder Spring-Wareham, LLC, 141 Idaho 185, 189, 108 P.3d 332, 336 (2005). “Public policy may be found and set forth in the statutes, judicial decisions or the constitution.” Id.

The first question is whether I.C. § 6-320(a)(3), requiring landlords to maintain leased premises in a non-hazardous condition, states a public policy of the State of Idaho. Section 6-320(a)(3) provides that a tenant may file an action against a landlord for damages and specific performance for maintaining the premises in a manner hazardous to the health or safety of the tenant. I.C. § 6-320 is a strict liability provision that is primarily directed toward giving the tenant leverage to require the landlord to keep the premises in good order. As such, it establishes a public policy that a landlord must maintain premises in a manner that is not hazardous to the health or safety of the tenant. This Court relied upon I.C. § 6-320(a)(3) when it adopted the rule that a landlord is under a duty to exercise reasonable care in light of all the circumstances. See Worden, 105 Idaho at 723, 672 P.2d at 1053; Stearns, 106 Idaho at 258, 678 P.2d at 50; Fleming, 116 Idaho at 525-26, 777 P.2d at 1198-99. In essence, this Court concluded that the Legislature established a policy for landlords to provide safe habitation for their tenants, separate and apart from the issue of whether one may recover under the specific provisions of I.C. § 6-320. Certainly, it would not be the public policy of the state to allow landlords to provide hazardous and unsafe premises to their tenants.

The next question is the extent of the public policy coverage. Bakker tells us that a declaration of public policy in a statute is to be targeted to the specific problem addressed by the Legislature and an expression of public policy in a statutory provision does not necessarily extend to the entire code chapter in which the expression is contained. Bakker, 141 Idaho at 189-90, 108 P.3d at 336-37. Looking at Section 6-320(a)(3) in context, the provision states that the “premises” are to be maintained in a nonhazardous condition, which necessarily means the leased premises. That is, the landlord is obligated to maintain the premises covered by the lease in a non-hazardous condition. In this case, that would include the apartment and common areas, i.e. the parking space (included in the lease), driveway, sidewalks, halls, and stairways providing access to Jesse’s apartment. However, there is nothing in the lease providing Jesse any ability to access the planting area or any other areas not included in the premises leased. Nor is there a public policy dictating that areas not necessary for habitation by the tenant should be subject to a specific requirement of maintaining the same in a safe condition.

The remaining question is whether the exculpatory clause is enforceable as written. The clause reads:

That the owner shall not be liable for damages due to either injuries or accidents caused by slipping, falling or from any other sources that occur either in the apartment building, the outside area of the apartment building, or on the outside premises of the lot or land, paving or sidewalks where the apartment building is located or from any act of God that either directly or indirectly may cause bodily harm of any nature.

The clause purports to relieve Lindsley from liability for injuries or accidents caused by slipping and falling, as occurred here, or “from any other sources.” Further, it purports to absolve him from liability for such injuries that might occur either in the apartment building or outside the building, but still on the premises. In short, the clause attempts to relieve the landlord of liability for any type of injury, wherever it may occur. The clause is too broad and does not speak clearly and directly to the particular conduct of the defendant intended to be immunized. See Anderson & Nafziger, 100 Idaho at 178, 595 P.2d at 712. While it might be reasonable to absolve the landlord for injuries or accidents caused by slipping or falling in the apartment building, in the outside of the apartment building, or on the outside premises of the lot or land, pavements or sidewalks (where the same were not maintained in a hazardous condition), or to exempt the landlord from liability for acts of God, the exemption of liability from accidents or injuries “from any other sources” is simply too broad.

While we have not considered the question of the enforceability of an overbroad exculpatory clause, we have considered the issue of enforceability of an overbroad contract provision in another area where a contractual provision is disfavored and strictly construed — covenants not to compete in contracts of employment. See Freiburger v. J-U-B Engineers, Inc., 141 Idaho 415, 420, 111 P.3d 100, 105 (2005). A covenant not to compete is reasonable and enforceable only if the covenant “(1) is not greater than necessary to protect the employer in some legitimate business interest; (2) is not unduly harsh or oppressive to the employee; and (3) is not injurious to the public.” Id. Applying the same principle here, it appears that the language absolving Lindsley of any liability for any occurrence anywhere on his property is simply too broad. Although he may have some legitimate interest in relieving himself from slip and fall injuries in areas not part of the tenant’s leased premises or from acts of God, to release himself from liability for any occurrence of any nature simply goes too far. Thus, the all-encompassing clause is simply too broad and unenforceable.

D.

The Jury Must Decide Whether Lindsley Exercised Reasonable Care

Jesse sued Lindsley on a negligence theory, alleging he should have known the sinkhole was a dangerous condition that presented an unreasonable risk to tenants, which he should have remedied prior to Jesse’s fall.⁴ Jesse also noted that she informed Lindsley of the problem with the sinkhole several times, and that she had been forced to walk in the planting area previously due to the rain in the driveway. This Court follows the modern trend that a landlord is under a duty to exercise reasonable care in light of all the circumstances. Stearns, 106 Idaho at 258, 678 P.2d at 50. Once the plaintiff establishes such a duty owed to the tenant, it is for a jury to decide whether the duty has been breached. See Id. Since the exculpatory clause in the rental agreement is not enforceable, Lindsley continues to owe a duty to his tenants to exercise reasonable care in light of all the circumstances. A jury must decide whether he exercised such care in this case. The district court erred when it granted summary judgment to Lindsley on this claim.

III.

We vacate the district court’s summary judgment and remand the case for further proceedings consistent with this opinion.

Justices BURDICK and Pro Tem TROUT concur.

1 . According to her deposition, the water in the driveway would have been over her shoes. In addition, Jesse testified in her deposition that she fell in the hole on the way to her mother’s apartment, which was downstairs. The Complaint alleges she was on her way to her car.

2 . On appeal, Lindsley ¿irgues I.C. § 6-320 has no application because Plaintiff based her complaint solely on a theory of common law negligence. In response, Jesse contends the parties and the court have treated her claim as a violation of I.C. § 6-320 and/or a negligence claim throughout the proceedings. The district court did address the statutory claim in its decision and we, thus, do likewise.

3 . Jesse does not claim she had any disadvantage in bargaining power, but argues that the second exception applies on the theory that the statutory warranty of habitability creates a duty for Lindsley to maintain the premises in a safe condition.

4 . Lindsley argues this clause should not be invalidated because the accident at issue here occurred on a portion of the premises where the landlord would not anticipate a tenant walking. Therefore, it is outside the scope of the duty to exercise reasonable care. This argument is unavailing for two reasons. First, we must look at this clause as a whole to determine its validity. We do not possess the power to rewrite the clause to avoid voidability. See, e.g., Shawver v. Huckleberry Estates, LLC, 140 Idaho 354, 362, 93 P.3d 685, 693 (2004) (quoting Smith v. Idaho State Univ. Fed. Credit Union, 114 Idaho 680, 684, 760 P.2d 19, 23 (1988)) (“Courts do not possess the roving power to rewrite contracts in order to make them more equitable.”). Second, there is evidence in this record to support Jesse’s claim that she advised Lindsley of the problem on a number of occasions and he took no action. Therefore, he had reason to know she used the route in question, which makes the garden area part of the premises for this purpose.