Kaitlin Barry v. Chris C. Khamnei ( 2013 )

Note: Decisions of a three-justice panel are not to be considered as precedent before any tribunal.
ENTRY ORDER
SUPREME COURT DOCKET NO. 2012-421
JUNE TERM, 2013
Kaitlin Barry } APPEALED FROM:
}
} Superior Court, Chittenden Unit,
v. } Civil Division
}
}
Chris C. Khamnei } DOCKET NO. S0433-11 CnC
Trial Judge: Geoffrey W. Crawford
In the above-entitled cause, the Clerk will enter:
Tenant appeals from the trial court’s ruling on a motion to alter and amend, following a
bench trial, in this landlord-tenant dispute. She argues that the court erred in finding landlord’s
explanation for withholding her security deposit facially sufficient under 9 V.S.A. § 4461. She
also asserts that the court erred in finding that landlord did not breach the warranty of
habitability, thereby denying her the right to recover costs and attorney’s fees under 9 V.S.A.
§ 4458. We affirm.
Following a bench trial, the court made the following findings. Tenant rented an
apartment from landlord in September 2010 for one year at a monthly rent of $700 plus heat and
electricity. She executed a written lease and provided landlord with a $700 security deposit.
Later that month, tenant advised landlord that she believed that her rent included heat, as had
been stated in an online advertisement. Landlord acknowledged that tenant was correct about the
online ad, and he agreed to reduce the rent to $650 per month, not including heat. Landlord
indicated that tenant should “change the lease to $650 and sign.” Tenant indicated that she
would deliver the changed lease to landlord, but she never did so. Nonetheless, tenant paid $650
per month between October 2010 and January 2011, and landlord accepted the reduced rent
without objection.
During tenant’s tenancy, landlord’s brother managed the property. Shortly after tenant
moved in, tenant’s boyfriend began living with her. Tenant apprised the apartment manager of
this, and the manager did not object. As time progressed, tenant found the apartment too cold.
The unit was heated by a gas heater. Tenant borrowed a space heater from landlord and
purchased a second space heater. She also bought a fan to improve circulation of warm air
through the apartment. In mid-January 2011, tenant complained about the heat to the Code
Enforcement Office of the City of Burlington. Its investigation revealed apartment temperatures
in the 50s. The apartment was condemned for several days and landlord paid for her to stay at a
local hotel. During this period, the Code Enforcement Office measured temperatures in the
apartment ranging from the low 50s to the 80s. Neither tenant nor landlord could explain these
fluctuations. The court rejected landlord’s assertion that tenant purposely turned off the heat to
sabotage the Code Enforcement Office’s investigation.
Not long after the condemnation period, the pipes in the bathroom froze and fractured.
The court found no credible explanation for the drop in temperature inside the apartment.
Landlord repaired the pipes. During her tenancy, tenant was concerned that landlord or his
representatives were entering her apartment without notice or permission. On one occasion, she
found that the space heaters had been moved from her unit to the basement. Another time, she
found her circulating fan nailed to the wall and broken. These entries into her apartment made
her uncomfortable. There as no evidence as to who came into the apartment.
Tenant moved out on January 31, 2011. Within a few days, landlord sent her an email
explaining his reasons for withholding $350 from her security deposit. Landlord stated as
follows:
Included is copy of lease provided to you in September. Needless
to say, I was upset with your dishonesty during your tenancy.
First, according to the lease it was $700 per month . . . we lowered
your rent to $650 based on the fact that [the apartment manager]
supposedly told you that heat was included. He was clear to you
that utilities were not included except water, hot water and internet.
Second, we asked you to change the lease and initial changes and
sign the [sic] we would provide a copy which you did not do.
Third, you tried to renegotiate again to have heat included AFTER
we were kind to offer a gesture to reduce the rent. Fourth, you
called the city after repeatedly turning the heat to low to show how
unsuitable the apartment was. Fifth, when the city was conducting
measurements, you went into the apartment and turned the heat to
low to continue the dishonesty. Sixth, you were in violation of
your lease by allowing your boyfriend to live in the apartment
without permission . . . this is usually a $50 per month charge for
extra utilities that I pay for and other usage in suitable apartments
only. I would not have approved your apartment as suitable for
two people.
Based on these circumstances, I am only willing to abide by the
original lease in September which clearly stated $700 per month.
You occupied the apartment for five months. You had your
boyfriend living there at least three of those five months. You paid
$700 for one month and $650 for four.
Your security deposit was $700. Your rent shortage is $200.
Your extra utility charge for your boyfriend living there is $150.
You are being sent a check for $350.
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The court found that this email was sent to tenant within fourteen days as required by
9 V.S.A. § 4461.
Based on these findings, the court turned to tenant’s claims. The court agreed with tenant
that she was entitled to the return of her full security deposit. It found that the rent had been
adjusted to bring it into conformity with landlord’s advertised price. Landlord had accepted the
reduced rent for four months without complaint and without insisting on a written amendment to
the lease. Landlord then tried to undo his prior agreement. The court found that, having agreed
to reduce the rent and having accepted the reduced amounts, landlord was bound by his own
agreement and he had no basis for withholding unpaid rent.
The court also found that landlord wrongfully withheld $150 based on a $50 monthly
charge for an additional occupant. The court credited tenant’s testimony that she had introduced
her boyfriend to the apartment manager and explained that he would be living with her. The
apartment manager did not object to the boyfriend’s presence or impose any additional monthly
charge. Instead, he acquiesced in the arrangement. There was no provision in the lease for an
extra charge for an additional resident. Given this, landlord had no basis to withhold $150. The
court thus entered judgment in tenant’s favor for $350.
The court turned next to tenant’s claim that landlord breached the warranty of habitability
through unauthorized entries and lack of proper heat. Tenant sought nominal damages for both
claims. The court found strong evidence to infer that someone employed by landlord had entered
the apartment without permission, and it awarded her nominal damages of $1 on this claim. The
court also awarded tenant $1 in nominal damages on the heating claim. The court found strong
evidence that the temperature in the apartment fell below reasonable levels during January 2011.
Why this happened was unknown as the heating system was relatively new and capable of
maintaining very high temperatures. As indicated above, the court found no credible evidence to
support landlord’s assertion that tenant tampered with the heater to build a case against him.
In its order, the court explained that the next step was for tenant to file an attorney’s fees
claim. It indicated that the fees must bear a reasonable relationship to the time spent on the
matter and also to the amount at issue. The court noted that the amount at issue had never been
great—essentially $350—and that landlord had long been willing to pay that amount. The court
found that any award in excess of the amount actually in dispute would require considerable
justification.
Tenant subsequently filed a motion to alter or amend the judgment and a request for
attorney’s fees and costs. Tenant indicated that she was entitled to recover attorney’s fees under
9 V.S.A. § 4461(e) because landlord willfully withheld her security deposit and under 9 V.S.A.
§ 4458(3) based on landlord’s breach of the warranty of habitability. Tenant indicated that she
had incurred attorney’s fees and taxable costs of $7696.76. In making her request, tenant noted
that this Court had rejected the notion that an award of attorney’s fees must bear a reasonable
relationship to the amount at issue. See Kwon v. Eaton, 2010 VT 73, ¶ 20, 188 Vt. 623. In her
motion to alter, tenant asked the court to specifically find that landlord had willfully withheld her
security deposit. Landlord responded to this motion and he also filed a motion to alter. He asked
the court to find that he lawfully entered tenant’s apartment and that he repaired the heating
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system within a reasonable period of time. He also asserted that he did not willfully withhold
tenant’s security deposit.
In ruling on these motions, the court noted that the underlying difficulty with this case
was that it had been driven from the beginning by tenant’s claim for attorney’s fees. The amount
due to tenant had always been modest. While the relatively small scale of the dispute did not
preclude an award of attorney’s fees if the statutory requirements were met, it did raise concerns
about the fairness and reasonableness of the claim. The court found it unnecessary to reach this
issue, however, because it concluded that tenant’s habitability claim and her security deposit
claim did not meet the statutory prerequisites for an attorney’s fee award.
As to the heating issue, the court found that landlord made repairs within a reasonable
period of time as required by 9 V.S.A. § 4458(a). It explained that the heating system was
relatively new and that landlord had the problem investigated by the furnace company
immediately. In the meantime, landlord paid for two nights’ lodging at a motel for tenant. The
court found this response appropriate and concluded that it did not support an award of
attorney’s fees under the statute.
With respect to the unauthorized entry into tenant’s apartment, the court agreed that the
entry should not have occurred. See 9 V.S.A. § 4460 (providing circumstances under which
landlord may enter rented premises without permission). The court found, however, that the law
did not specifically provide for attorney’s fees when 9 V.S.A. § 4460 was breached, and the
court did not see the unauthorized entry as a breach of the warranty of habitability set forth in 9
V.S.A. § 4457. See Hilder v. St. Peter, 144 Vt. 150, 159-61 (1984) (holding that implied
warranty of habitability requires that “landlord will deliver over and maintain, throughout the
period of the tenancy, premises that are safe, clean and fit for human habitation”).
The court observed that, in ruling on the motion for attorney’s fees, it had become clear
that the underlying breach of warranty of habitability claim had not been proved at trial. While
the damages sought were nominal, the issue was not without consequences. The court thus
amended its findings and conclusions to remove the entry of judgment in tenant’s favor on the
warranty of habitability claims. It reiterated that a loss of heat, or significant fluctuations in
temperature, including drops below safe levels, which was followed by appropriate attempts to
repair the system, did not reach the level of a breach of the warranty. Similarly, unauthorized
entry was covered by a separate statutory provision and, at least on this record, did not support a
warranty claim.
Turning to the security deposit claim, the court found that landlord had complied with the
relevant statute, 9 V.S.A. § 4461(e). He provided a statement to tenant within fourteen days
explaining why he was withholding $350, and, at least on its face, the statement listed deductions
permissible under § 4461(b): nonpayment of rent and nonpayment of utility charges. That
landlord’s explanation for the deductions ultimately failed to satisfy the court did not entitle
tenant to recover attorney’s fees. The court found that there might be cases where the written
explanation was so spurious or perfunctory that it did not satisfy the statute, but this was not such
a case. Tenant appealed from the court’s order.
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Tenant first argues that the court erred in concluding that landlord provided a facially
sufficient explanation for withholding part of her security deposit. She addresses each of the
reasons offered by landlord and argues that each fail under the statute. In support of her claims,
she points to evidence adduced at trial. She maintains that landlord knew at the time he wrote
his email that he had no right to withhold the security deposit for any of the reasons he advanced.
Our review of the court’s order is deferential. We uphold the court’s findings unless
clearly erroneous, meaning there is no credible evidence in the record to support them. V.R.C.P.
52(a)(2); Mullin v. Phelps, 162 Vt. 250, 260 (1994). We will uphold the court’s conclusions
where supported by the findings. Bisson v. Ward, 160 Vt. 343, 350 (1993). It is for the trial
court to “determine the credibility of witnesses and weigh the persuasive effect of the evidence.”
Bruntaeger v. Zeller, 147 Vt. 247, 252 (1986).
The trial court’s decision is supported by the record here. Pursuant to 9 V.S.A.
§ 4461(b), a landlord may retain all or a portion of the security deposit for certain specified
reasons, including nonpayment of rent and nonpayment of utility or other charges. The landlord
must provide the tenant with a written statement itemizing any deductions from the security
deposit within fourteen days of the date that the tenant vacated the dwelling unit. Id. § 4461(c).
“If a landlord fails to return the security deposit with a statement within 14 days, the landlord
forfeits the right to withhold any portion of the security deposit. If the failure is willful, the
landlord shall be liable for double the amount wrongfully withheld, plus reasonable attorney’s
fees and costs.” Id. § 4461(e).
As set forth above, landlord informed tenant in writing that he was withholding a portion
of the security deposit to cover unpaid rent and costs associated with having another tenant in the
unit. The court did not err in finding these reasons facially valid. As to the rent issue, the
landlord testified at trial that he relied on the terms of the lease that tenant had signed when she
first moved in. He maintained that tenant was not entitled to the lowered rent because she had
failed to provide him with a copy of an amended lease. Landlord also pointed to a provision in
the lease that he believed supported his position that only one person was allowed to reside in the
apartment. It was not wholly unreasonable for landlord to deduct $50 in additional monthly
costs associated with having a second tenant in the unit. We agree with the trial court that,
although landlord’s reasons were not ultimately persuasive, they were sufficient for purposes of
the statute.
Tenant next asserts that the court erred in finding that landlord did not violate the
warranty of habitability by failing to provide adequate heat. She maintains that the facts do not
support the court’s conclusion on this issue. She points to her own testimony that she notified
landlord multiple times about the heat issue and that he failed to timely fix the problem.
Again, the trial court concluded otherwise and its decision is supported by the record.
The trial court found that landlord timely responded to the heating issue. It explained that the
heating system was relatively new and that no explanation could be found for the fluctuating
temperatures in the apartment. Landlord repaired the system promptly and covered the costs of
tenant’s two-day hotel stay. The court similarly found no plausible explanation for the drop in
temperature that caused the pipes to freeze shortly after tenant’s hotel stay. Landlord promptly
repaired the damaged pipes. While tenant argues that the heating problem was an ongoing
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problem that landlord neglected, the court made no such finding. It is evident that tenant
disagrees with the court’s conclusion, but she fails to show that the court’s findings are clearly
erroneous or that its conclusion is unsupported by the findings.
Finally, given our conclusions above, we need not consider tenant’s assertion that the
trial court erred in its discussion of the amount of attorney’s fees recoverable under the relevant
statutes.
Affirmed.
BY THE COURT:
_______________________________________
Paul L. Reiber, Chief Justice
_______________________________________
John A. Dooley, Associate Justice
_______________________________________
Marilyn S. Skoglund, Associate Justice
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