Summary
holding failure to deliver possession existed when tenants entered premises and found broken air conditioning and strong odor, tenants notified landlord that day, and landlord failed to remedy issue within day; concluding that tenant could terminate lease with written notice and no opportunity for landlord to cure
Summary of this case from Dinh v. RainesOpinion
Case No. 118,070
09-23-2020
Laura AHLSTROM and Jason Bleecher, Plaintiffs/Appellants, v. CAMPBELL REAL ESTATE, LLC d/b/a Campbell Property Management, Defendant/Appellee.
Brady T. Burr, BURR LAW OFFICES, PLLC, Oklahoma City, Oklahoma, for Plaintiffs/Appellants Ky D. Corley, BAKER, IHRIG & CORLEY, P.C., Stillwater, Oklahoma, for Defendant/Appellee
Brady T. Burr, BURR LAW OFFICES, PLLC, Oklahoma City, Oklahoma, for Plaintiffs/Appellants
Ky D. Corley, BAKER, IHRIG & CORLEY, P.C., Stillwater, Oklahoma, for Defendant/Appellee
OPINION BY STACIE L. HIXON, JUDGE: ¶1 Laura Ahlstrom and Jason Bleecher (Tenants) appeal the trial court's August 19, 2019 Journal Entry denying their Motion to Vacate or Modify Judgment. Based on our review of the record and applicable law, we reverse and remand for further proceedings consistent with this Opinion.
BACKGROUND
¶2 On October 8, 2018, Tenants filed suit alleging that Campbell Real Estate, LLC d/b/a Campbell Property Management (Landlord) breached the Oklahoma Residential Landlord Tenant Act (ORLTA) and seeking a judgment of $2,775 for the first month's rent and security deposit along with their attorney's fee and costs. Landlord denied breaching the ORLTA and requested the trial court enter judgment in its favor for the same amount, along with its attorney's fee and costs.
¶3 The pertinent facts of this case are largely undisputed. The record provides that on April 17, 2018, Tenants entered an agreement to lease a house from Landlord located at 1722 James Place, Stillwater, Oklahoma, in Payne County. Tenants gave Landlord a security deposit of $1,200 when the lease was entered.
¶4 The lease commenced on August 1, 2018. When Tenants arrived that day to take possession of the premises, they were told it was still being cleaned and were asked to return in thirty to forty-five minutes. Upon their return at around 1:00 p.m., they received keys to the house. They also paid the first month's rent in the amount of $1,500 and a $70 pet payment.
¶5 Upon entering the house, Tenants noticed it was extremely hot because the air conditioning was not working. There was also a strong odor, and they noticed exposed metal tacking strips where carpet had been pulled up.
¶6 Within thirty minutes of obtaining the keys, Tenants returned to the Landlord's office, and notified a secretary about the condition of the property. Tenants eventually spoke to the office manager, Jill Mozarko (Mozarko), and asked if there was another property available. Mozarko said another property was not available, and Landlord would do what they could to make the house livable.
¶7 Tenants returned the keys to the house to Landlord. The parties then agreed that Landlord would give Tenants a place to stay for the night and would install a temporary air conditioning unit and clean the floors in the house.
¶8 Later that day, Tenants prepared a letter to Landlord outlining the conditions of the house and stating they would inspect the property the next day to determine if Landlord had corrected the issues. The letter also stated if the conditions were not corrected by the next day, Tenants would consider the lease agreement to be "null and void" and expect a refund of their first month's rent and security deposit. Tenants spent the night in Landlord's unfurnished temporary unit and slept on an air mattress.
¶9 Mid to late morning on August 2, 2018, Tenants returned to Landlord's office. It is undisputed that Mozarko refused to give Tenants the keys to the house at that time. Mozarko contended that she told Tenants to come back the afternoon of August 2nd, but that they returned in the morning, which did not give Landlord enough time to ensure the conditions of the house were corrected. Mozarko also asserted she did not want to turn over the keys until she personally inspected the conditions of the house and that the carpet cleaners were still finishing cleaning the floors when Tenants arrived that morning. Mozarko contended she told Tenants to keep the keys to the temporary unit until they received a call from Landlord later that afternoon.
¶10 Tenants declined to keep the keys to the temporary unit and asserted they did not return in the afternoon because Mozarko told them Landlord had fourteen days to correct the conditions of the house and that they received no call that afternoon to tell them anything was different. Mozarko contended that Tenants told her they either wanted the keys to the house then or not at all and already had a new place lined out, though Mozarko admitted that at some point she told Tenants that Landlord had fourteen days to fix any issues with the house.
¶11 The same day, Tenants wrote a second letter to Landlord stating they were terminating the lease and requesting a refund of their first month's rent and security deposit. Tenants subsequently received a letter from Landlord stating it was not issuing them a refund, and the lease remained in full force and effect.
¶12 Tenants filed suit approximately two months later on October 8, 2018. A bench trial was held on February 22, 2019. After hearing evidence and the arguments of counsel, the trial court took its decision under advisement.
¶13 On March 20, 2019, the trial court entered its written decision. The court determined that after Tenants provided written notice to Landlord about the conditions of the property, Landlord had fourteen days pursuant to 41 O.S.2011, § 121 to remedy the breach, and Tenants would be entitled to terminate the lease only if the breach was not corrected at that time. The trial court also found that pursuant to the written lease agreement, Landlord was entitled to retain the first month's rent but that Tenants were entitled to a judgment for the security deposit and pet payment amounts. The trial court also ordered each party to pay their own attorneys' fees.
¶14 On March 29, 2019, Tenants filed a Motion to Settle Journal Entry, a Motion for Order Nunc Pro Tunc, and a Motion to Vacate or Modify Judgment. A Journal Entry of Judgment was filed on May 22, 2019, memorializing the trial court's written decision. On August 19, 2019, the trial court filed a Journal Entry denying Tenants' motion to vacate.
In the Motion for Order Nunc Pro Tunc, Tenants alleged there was a scrivener's error in the trial court's written decision, which stated Landlord was entitled to a judgment in the amount of $1,500, rather than Tenants. In the August 19, 2019 Journal Entry, the trial court granted the Motion for Order Nunc Pro Tunc, though the scrivener's error contained in the court's written decision was corrected in the May 22, 2019 Journal Entry of Judgment. For the first time on appeal, Landlord alleges the judgment amount awarded to Tenants in the May 22, 2019 Journal Entry of Judgment was incorrect based on the evidence presented at trial. This issue is not properly before this Court. See Jones v. Alpine Investments, Inc. , 1987 OK 113, ¶ 11, 764 P.2d 513 ("Parties on appeal are limited to the issues presented at the trial level."). In any event, given our resolution of this appeal, the issue is also moot.
¶15 Tenants appeal.
STANDARD OF REVIEW
¶16 Pursuant to 12 O.S.2011, § 653(C), we deem Tenants' motion to vacate as filed immediately after the Journal Entry of Judgment was filed on May 22, 2019, and construe it as a timely filed motion for new trial. See 12 O.S.2011, §§ 651, 1031. Moreover, we characterize the proceedings under review as an appeal from the denial of the motion for new trial, rather than an appeal of the underlying judgment.
Supreme Court Rule 1.22(c)(2), 12 O.S., ch. 15, app. 1, provides that an appeal may be commenced from "both the underlying judgment, ... and the order disposing of the post-trial motion, either by filing a single petition in error, or by filing separate petitions in error if both are filed within thirty (30) days of filing of the order disposing of the post-trial motion." Tenants' Amended Petition in Error, appealing the denial of the motion for new trial, was filed more than thirty days after their initial Petition in Error, appealing the underlying judgment.
¶17 Generally, an abuse of discretion standard is used for appellate review of an order denying a motion for new trial. Grisham v. City of Oklahoma City , 2017 OK 69, ¶ 4, 404 P.3d 843. An abuse of discretion occurs when the trial court bases its decision on an erroneous conclusion of law or where there is no rational basis in evidence for the ruling. Id .
¶18 However, this appeal involves the construction of the ORLTA, which is a question of law. See Hub Partners XXVI, Ltd. v. Barnett , 2019 OK 69, ¶ 6, 453 P.3d 489. The Oklahoma Supreme Court holds that "[a]pplication of the appellate abuse-of-discretion standard for reviewing a motion for new trial uses a de novo review when examining the correctness of an alleged erroneous conclusion of law." Indep. Sch. Dist. # 52 of Oklahoma Cty. v. Hofmeister , 2020 OK 56, ¶ 17, 473 P.3d 475. Accordingly, we give no deference to the trial court's construction of the ORLTA in determining whether an abuse of discretion occurred in denying the motion for new trial. See Hub Partners XXVI, Ltd. , 2019 OK 69, at ¶ 6, 453 P.3d 489 ("Under the de novo standard of review, the Court has plenary, independent, and non-deferential authority to determine whether the trial tribunal erred in its legal rulings.").
ANALYSIS
¶19 Tenants assert the trial court abused its discretion by denying their motion for new trial wherein they argued the court erroneously relied on 41 O.S.2011, § 121 to reach its underlying decision, rather than 41 O.S.2011, §§ 117 - 118, 120.
¶20 The ORLTA, 41 O.S.2011, § 101 et seq. , governs the parties' residential rental agreement. See 41 O.S.2011, § 103(A) (stating the ORLTA "applies to, regulates and determines rights, obligations and remedies under a rental agreement, wherever made, for a dwelling unit within this state."). Any agreement or provision of the parties' written rental agreement that conflicts with the ORLTA is unenforceable. See 41 O.S.2011, § 103(B).
¶21 Section 117(A) of the ORLTA sets forth a landlord's duty to deliver possession of the premises at the commencement of the lease term. The statute provides: "[a]t the commencement of the term a landlord shall deliver full possession of the premises to the tenant in compliance with the rental agreement and Section 118 of this title ." 41 O.S.2011, § 117(A) (emphasis added).
¶22 Section 118( A) states in pertinent part:
A landlord shall at all times during the tenancy:
...
2. Make all repairs and do whatever is necessary to put and keep the tenant's dwelling unit and premises in a fit and habitable condition;
3. Maintain in good and safe working order and condition all electrical, plumbing, sanitary, heating, ventilating, air-conditioning and other facilities and appliances , including elevators, supplied or required to be supplied by him; ....
41 O.S.2011, § 118(A) (emphasis added).
¶23 Section 120(A) states:
If the landlord fails to deliver possession of the dwelling unit to the tenant, rent abates until possession is delivered and the tenant may terminate the rental agreement by giving a written notice of such termination to the landlord, whereupon the landlord shall return all prepaid rent and deposit, or the tenant may, at his option, demand performance of the rental agreement by the landlord and maintain an action for possession of the dwelling unit against any person wrongfully in possession and recover the actual damages sustained by him.
41 O.S.2011, § 120(A).
¶24 The interpretation of these statutes is governed by legislative intent, which is ascertained from a statute's plain language. Brisco v. State ex rel. Bd. of Regents of Agric. & Mech. Colleges , 2017 OK 35, ¶ 10, 394 P.3d 1251. Intent is also ascertained "from the whole act in light of its general purpose and objective considering relevant provisions together to give full force and effect to each."
¶25 Tyler v. Shelter Mut. Ins. Co. , 2008 OK 9, ¶ 12, 184 P.3d 496.
¶26 The plain language of section 117(A) requires a landlord to deliver possession at the time of commencement of the lease both in compliance with the rental agreement and with section 118. Section 118 requires, inter alia , the dwelling unit and premises to be in a fit and habitable condition and specifically requires the air conditioning to be in good and safe working order. Reading section 120 together with section 117, section 120 gives a tenant the option for remedies if a landlord fails to turn over possession of the leased premises within the meaning of section 117.
¶27 In the present case, the lease commenced on August 1, 2018. It is undisputed that when Tenants arrived to take possession of the premises that day, the air conditioning was not in working order. Thus, the condition of the dwelling unit did not comply with section 118, and in turn, Landlord failed to deliver possession of the premises as required by section 117. Thus, pursuant to section 120, Tenants had the right to terminate the rental agreement by giving written notice to Landlord, and Landlord was required to return the rent and deposit payments.
Given it is undisputed the air conditioning was not working, we need not determine if the house was in a fit and habitable condition within the meaning of section 118(A)(2), given the odor and carpet issues.
¶28 In reaching its underlying judgment, the trial court erroneously relied on 41 O.S.2011, § 121(A), which provides:
Except as otherwise provided in this act, if there is a material noncompliance by the landlord with the terms of the rental agreement or a noncompliance with any of the provisions of Section 18 of this act which noncompliance materially affects health or safety, the tenant may deliver to the landlord a written notice specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than thirty (30) days after receipt of the notice if the breach is not remedied within fourteen (14) days, and thereafter the rental agreement shall so terminate as provided in the notice unless the landlord adequately remedies the breach within the time specified.
¶29 Based on a plain reading of section 121 while giving full force and effect to section 120, we find section 121 concerns habitability issues occurring or discovered during occupancy; whereas, section 120 addresses the remedies available to a tenant when a landlord fails to deliver possession at the time of the commencement of the lease. See Vasquez v. Chi Properties, LLC , 302 Neb. 742, 925 N.W.2d 304, 315-16 (2019) (similarly interpreting relevant provisions of Nebraska's version of the Uniform Residential Landlord and Tenant Act (URLTA)). Again, Landlord failed to deliver possession at the time of commencement within the meaning of section 117. Therefore, Tenants were entitled to the remedies available under section 120, and section 121 was inapplicable.
Not only is our interpretation of the ORLTA supported by its plain language, but we avoid the absurd result of requiring a tenant (who may have nowhere else to go and who immediately discovers the conditions of the premises) to move into an uninhabitable dwelling or one out of compliance with section 118, wait fourteen days for the landlord to correct the conditions, only then to terminate the lease and vacate the premises if the landlord fails to do so. McIntosh v. Watkins , 2019 OK 6, ¶ 4, 441 P.3d 1094 ("Statutory construction that would lead to an absurdity must be avoided and a rational construction should be given to a statute if the language fairly permits."). Our interpretation also comports with the policy behind the ORLTA, modeled after the URLTA, to discourage occupancy of premises that are not fit and habitable. See Vasquez , 925 N.W.2d at 315 ("For obvious public policy reasons, the URLTA discourages occupancy of premises that are not fit and habitable.").
¶30 Landlord argues that Tenants agreed to modify the written rental agreement to give Landlord time to correct the conditions of the house and that Tenants breached this agreement by sending written notice of their termination of the lease on August 2, 2018. However, Tenants made it clear in their first letter to Landlord that they were not agreeing to modify their rights and remedies under the ORLTA.
¶31 Accordingly, the trial court abused its discretion by not granting Tenants a new trial based on their argument that they were entitled to terminate the lease and to a refund of their rent and security deposit payments under section 120.
¶32 In view of the above discussion, we also hold Tenants are the prevailing parties in this suit. As prevailing parties, Tenants are entitled to their attorney's fee and costs pursuant to the mandatory award provisions of 41 O.S.2011, § 105 and 12 O.S.2011, § 928. Therefore, we remand this matter to the trial court. Upon remand, the trial court shall enter judgment in favor of Tenants in the amount of all prepaid rent and deposit payments made to Landlord, and shall determine Tenants' appropriate and reasonable attorney's fee and costs as prevailing parties pursuant to this Opinion and State ex rel. Burk v. City of Oklahoma City , 1979 OK 115, 598 P.2d 659.
We note Tenants presented evidence that they paid Landlord the first month's rent in the amount of $1,500, along with a $70 pet payment and a $1,200 security deposit, totaling $2,770. However, in their Small Claims Affidavit they requested a judgment in the amount of $2,775. This discrepancy is for the trial court's resolution on remand.
--------
CONCLUSION
¶33 We reverse the trial court's August 19, 2019 Journal Entry denying Tenants' motion for new trial and remand for further proceedings consistent with this Opinion.
¶34 REVERSED AND REMANDED .
WISEMAN, C.J., and THORNBRUGH, P.J., concur.