Paul Lewis v. Vernice Zanco, et ux

FILED
MARCH 30, 2021
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
PAUL LEWIS, an individual, and all those ) No. 37471-8-III
similarly situated, )
)
Appellant, )
)
v. )
)
VERNICE ZANCO, an individual, and ) PUBLISHED OPINION
FRED ZANCO, an individual, and their )
marital community, d/b/a ZANCO )
PROPERTIES, and UNIVERSITY )
SOUTH AND EAST, LLC., a Washington )
limited liability company, )
)
Respondents. )
PENNELL, C.J. — The Residential Landlord-Tenant Act of 1973 (RLTA),
chapter 59.18 RCW, is a comprehensive statute, intended to regulate landlord-tenant
disputes. When rights and remedies are available to resolve a landlord-tenant dispute
under the RLTA, they operate to the exclusion of more general remedies available under
the Consumer Protection Act (CPA), chapter 19.86 RCW. But not all landlord-tenant
disputes are addressed by the RLTA. When the RLTA’s rights and remedies are not at
issue, there is no basis for barring other statutory claims, such as those under the CPA.
No. 37471-8-III
Lewis v. Zanco
Paul Lewis sued his former landlord, Zanco Properties (Zanco), alleging it had
violated the CPA by reaching outside the RLTA to impose a state fire code fine. By its
very nature, this claim was not covered by the RLTA. As such, it was not subject to
dismissal based on the RLTA. The trial court’s holding to the contrary is reversed.
FACTS
Paul Lewis started renting an apartment from Zanco in September 2014. He paid a
$200.00 security deposit, a nonrefundable $150.00 for carpet cleaning and administrative
fees, and $495.00 in monthly rent. The rental agreement noted the smoke detector was
functional. It also warned Mr. Lewis it was his responsibility to maintain the smoke
detector, and he “could be held liable for a fine of up to $200.00 per RCW 59.18.130(7)
and RCW 43.44.110” if he did not fulfill this duty. Clerk’s Papers (CP) at 34, 79. This
responsibility was listed as one of Zanco’s “House Rules of Occupancy.” Id. at 34, 78.
Failure to abide by these rules was “grounds for termination of tenancy.” Id. at 34, 78-79.
Mr. Lewis moved out of the apartment on July 29, 2016, and Zanco sent him a
final bill on August 4. It itemized $699.90 worth of charges, primarily for cleaning
services. The largest single charge was a $200.00 fee for the smoke detector, which
according to Zanco was “not working.” CP at 54, 80. Zanco subtracted one $5.00
overpayment and Mr. Lewis’s $200.00 security deposit from these charges, leaving a
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Lewis v. Zanco
balance owing of $494.90. Zanco informed Mr. Lewis he had 14 days to pay the charges
before they would be “turned over to collections.” Id. at 53. Mr. Lewis sent Zanco a letter
disputing the charges on August 18. Zanco responded by sending the unpaid bill to
collections. “Because [Zanco’s] third-party collection action threatened Mr. Lewis’[s]
continued housing assistance program support, he capitulated to [its] demand for a
revised payment of $510.00 under protest.” Id. at 80.
Mr. Lewis sued Zanco and its owners in September 2017. His complaint alleged
Zanco’s “unauthorized imposition of administrative agency ‘fines’ against tenants
constitutes unfair or deceptive conduct” based upon Zanco’s imposition of the smoke
detector fine. CP at 7. As relief, Mr. Lewis sought class action certification, a security
deposit refund, declaratory relief regarding the imposition of the smoke detector fine, an
award of triple the smoke detector fine amount, and reasonable attorney fees and costs.
Zanco moved to dismiss Mr. Lewis’s claim under CR 12(b)(6), or alternatively,
CR 12(c) and CR 56. It argued Mr. Lewis could not bring a claim related to the RLTA
under the CPA; the complaint was time-barred by a one-year statute of limitation under
RCW 4.16.115; and Zanco had the authority to impose the smoke detector fine as a civil
penalty.
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The trial court agreed Mr. Lewis raised “landlord-tenant problems” covered by the
RLTA. CP at 80. It posited RCW 59.18.130(7), RCW 59.18.230(3), and RCW 59.18.280
addressed Mr. Lewis’s claims. Applying State v. Schwab, 103 Wn.2d 542, 693 P.2d 108(1985), the court concluded “these landlord tenant disputes” did not violate the CPA. Id.“Although not a necessary finding based on [the Schwab] holding,” the trial court also
concluded “the assessment of a $200.00 fine under RCW 43.44, et seq., is within the
purview of the state fire department.” Id. The court further determined “the statute of
limitation present in RCW 4.16.115 is not applicable . . . because Landlord Tenant
disputes do not constitute a violation of [or are not] actionable under the CPA.” Id. at 80-
81; see 1 Report of Proceedings (Dec. 20, 2019) at 16-17 (“I . . . wouldn’t find that the
statute of limitations for the penalties would be the appropriate statute of limitations, but
again, I’m not sure that matters based upon my ruling [regarding the CPA].”).
Mr. Lewis now appeals the trial court’s dismissal of his complaint.
ANALYSIS
The issue here is whether Zanco’s imposition of a $200 fine for Mr. Lewis’s
failure to maintain a smoke detector was a dispute falling under the scope of the RLTA.
If so, the Supreme Court’s holding in Schwab would prohibit Mr. Lewis from challenging
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Zanco’s imposition of the fine under the CPA. But if not, the order of dismissal should be
reversed.
In Schwab, the State claimed the defendant’s substandard housing practices
constituted an unfair trade practice in violation of the CPA. 103 Wn.2d at 544. The
Supreme Court disagreed. The court explained the RLTA was enacted to provide a
comprehensive set of “rights, duties and remedies of both landlords and tenants.” Id. at
551. In contrast, the CPA did not suggest any legislative intent to address the “rental of
residential housing.” Id. at 549. Furthermore, the legislature specifically rejected an
amendment to the RLTA that would have explicitly made RLTA violations bases for a
CPA claim. Id. at 551-52. Given this legislative structure, Schwab held violations of the
RLTA “do not also constitute violations of the [CPA].” Id. at 545.
Although the Schwab opinion is not a model of clarity, we do not interpret Schwab
to hold that all disputes between landlords and tenants must be resolved under the RLTA.
Instead, we read Schwab to say that when the RLTA provides a set of rights and
remedies, those rights and remedies operate to the exclusion of the CPA. This reading is
consistent with the brief description of Schwab set forth in Panag v. Farmers Insurance
Company of Washington: “In Schwab, this court declined to allow CPA actions based on
violations of the [RLTA]. This court considered it inappropriate to extend the CPA to
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landlord-tenant disputes in view of the detailed nature of the RLTA, which includes an
array of specific remedies.” 166 Wn.2d 27, 55 n.12, 204 P.3d 885 (2009).
Zanco does not seriously contest the foregoing understanding of Schwab. Instead,
Zanco argues its imposition of the $200 fine is governed by the RLTA. As a result, Zanco
claims Mr. Lewis’s challenges to the fine must be pursued under the RLTA, not the CPA.
We disagree with this assessment.
The statutory fine at issue in this case is part of our state’s fire protection code,
chapter 43.44 RCW, not the RLTA. See Former RCW 48.48.140 (1995), recodified as
RCW 43.44.110 (LAWS OF 2006, ch. 25, § 13). The fire code holds tenants responsible for
maintaining smoke detection devices. See RCW 48.48.140(3). According to the code,
failure to comply with this obligation “shall be punished by a fine of not more than two
hundred dollars.” Former RCW 43.44.110(4) (2006). At the time of the parties’ dispute,
the fire code did not explicitly identify the entity responsible for imposing and collecting
a smoke detection device fine. The statute now clarifies the authority rests with a city or
town’s fire department chief, county fire marshal, or other designated county fire official.
RCW 43.44.110(5)(b)(i)-(ii).
As Zanco points out, the RLTA makes reference to the fire code’s requirement that
tenants maintain smoke detection devices. The RLTA imposes on landlords the duty to
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give tenants written notice of their “responsibility to maintain the smoke detection device
in proper operating condition and of penalties for failure to comply with the provisions of
RCW 43.44.110(3).” RCW 59.18.060(12)(a). The RLTA also states that one of a tenant’s
statutory duties is to maintain a smoke detector. RCW 59.18.130(7).
While the RLTA references a tenant’s statutory smoke detector duties, the RLTA
does not reference smoke detector fines. A landlord’s remedies for a tenant’s violation of
statutory duties (including the duty to maintain a smoke detector) are set forth in detail in
the RLTA. Those remedies range from notice of the need to repair to initiation of an
unlawful detainer action. Former RCW 59.18.170 (1973); RCW 59.18.180-.190.
Nowhere in the RLTA is a landlord authorized to impose a fine. As held by Schwab, the
remedies set forth in the RLTA are exclusive. Nothing in the RLTA allowed Zanco to
reach outside the RLTA for a remedy, such as a fine.
Zanco suggests that regardless of what is generally contemplated by the RLTA, a
fine was authorized in Mr. Lewis’s case based on his lease agreement and because the
RLTA covers disputes over illegal leases. See RCW 59.18.230(3). The problem with this
argument is Mr. Lewis had no claim that his lease was unlawful. The parties’ lease did
not purport to authorize Zanco to impose a fire code fine. As contemplated by the RLTA,
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RCW 59.18.060(12)(a), the lease merely advised Mr. Lewis of his statutory obligation to
maintain a smoke detector and the risk of a fine.
In assessing the $200 fire code fine against Mr. Lewis, Zanco reached outside the
comprehensive ambit of the RLTA. Schwab does not apply in this context. Regardless of
whether Mr. Lewis can ultimately succeed on a CPA claim, his suit against Zanco was not
governed by the RLTA and should not have been dismissed based on Schwab.
CONCLUSION
The order of dismissal is reversed. This matter is remanded for further
proceedings.
_________________________________
Pennell, C.J.
WE CONCUR:
______________________________
Siddoway, J.
______________________________
Lawrence-Berrey, J.
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