Daily Development for Wednesday, January 17, 2008
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri

LANDLORD/TENANT; LANDLORD LIABILITY FOR INJURY TO TENANTíS GUESTS; EVICTION PROCEEDINGS: Following judgment for possession in unlawful detainer action, even though sheriff has not yet served a writ of possession, landlord has duty to conduct periodic inspections to insure that the premises are safe for tenantís guests, even where the tenant remains in possession and is operating a dance hall in defiance of a lease prohibition.

Stone v Center Trust Retail Props., Inc. 163 CA4th 608 (2008), 77 CR3d 556 For a summary of the prior court of appeal decision in Stone v Center Trust Retail Props., Inc. 146 CA4th 1435, 53 CR3d 668 (2007)

Center Trust owned a retail mall with a restaurant tenant that defaulted on its rent in August 2001. Center Trust began unlawful detainer proceedings in October 2001 and in late December was awarded a judgment of possession. The restaurant, however, continues to operate past the time of judgment. 

Before the sheriff served the writ of possession, Stone, an invitee, hosted a party at the restaurant. While dancing on a temporary wooden dance floor, Stone slipped in water  and fell, fracturing her ankle. (One assumes that the jury concluded the water came from a leak, because some evidence indicated that there was a lot of water on the floor.) . Stone had to have several operations and suffered diminished range of motion and lingering pain. Stone sued Center Trust and the restaurant owner. Center Trust cross-claimed against the owner for indemnity, but the owner was never served with either complaint and eventually was dismissed.

Following a jury trial on liability and damages, the court found Center Trust partially responsible awarded damages to Stone. Center Trust appealed. 

The appeals court first stated the California rule to be that, in order to protect forseeable plaintiffs from personal injury,  a landlord of commercial premises must use reasonable care to be sure that property is safe at the beginning of tenancy and must  repair hazards of which it learns thereafter.   During the tenancy, however, the court acknowledged that the tenant had the primary possession and primary ability to remedy conditions, and stated that the landlord's liability for a dangerous condition is limited to matters of which the landlord has actual knowledge and the right and ability to cure.

Here, the court reasoned, the landlord's responsibility was more than that of a landlord out of possession and less than that of an occupying landowner. The court ruled that the trial court should have instructed the jury that the landlord had a duty to inspect during the unlawful detainer proceedings, because Center Trust knew that defaulting tenants sometimes neglect property and that the restaurant was violating its lease by running an after-hours dance club.

The court of appeal ruled that, to balance between safety and landlord self-help, Center Trust's duty to inspect accrued on entry of judgment of possession and included making reasonable periodic inspections thereafter. The trial record, however, did not indicate at what point the jury concluded the landlord's duty to inspect began. Therefore, the court of appeal remanded for retrial of liability so that the parties could present evidence of whether reasonable inspection on entry of the judgment of possession or later inspections would have discovered the leak. After the jury determined responsibility for Stone's injuries, the trial court was to recalculate the damage award using the first jury's determination of Stone's total damages.

The dissent objected to the majority's unsolicited announcement of a new rule of law, essentially that a right to inspect creates a duty to inspect. The dissent argued that it was unnecessary to formulate a new rule or to remand, because substantial evidence supported the jury's verdict.  Apparently the dissent argued that the landlordís knowledge that tenant was unlawfully operating a dance club created some duty of responsibility to the plaintiff for the consequences of such operation.  The dissent concluded that any change to the balance of duties between landlord and tenant should be left to the legislature.

Reporterís Comment:   This "bright line" rule creates too many shadows on the issue of a landlord's liability for defective premises. If the duty to inspect arises upon entry of a judgment of possession, as the opinion holds, does that imply that before that time there is no such duty (as this court implied out of its reading of Martinez v Bank of America)? A bright line rule is not much good if the duty is the same on both sides of the line; the dissent quotes the lease as giving the landlord the right to inspect "at all times."

The dissenting opinion's version of the lease gives the landlord the right to reenter-rather than the right to inspect-on default, and perhaps that is the significant feature the majority meant. But in light of Californiaís statutory prohibition of forcible entry, I do not believe that a landlord has a meaningful right to enter (and alter leased premises) just because its lease says so. A writ of possession entitles a landlord only to instruct a sheriff to dispossess a tenant, not to do so itself.

The California rule requires a landlord to exercise due care with regard to the premises it owns. That duty of care must be reconciled with the fact that it does not have actual possession of those premises. Even if there is an explicit or implicit right to inspect, it is unclear what a landlord should do when an inspection reveals a danger to the public. Since self-help is prohibited, the landlord cannot padlock the premises on its own; it must get judicial assistance. Perhaps knowledge of the illegal after-hours dancing should have led this landlord to call the police, but how would that have to led to avoidance of the plaintiff's slip and fall so as to call it lack of due care?

Editorís Comment: Itís been some time since the editor was a full time California, and consequently the editor perhaps should be excused for his failure to appreciate the ďopen checkbookĒ attitude toward premises liability demonstrated here.

Outside of California, the editor does not understand it to be the law that a landlord is responsible for conditions in areas turned over to the tenantís control.  Although it might be argued that a ceiling leak, for instance, could be ascribed to a failure of the landlord to maintain the roof structure - an area likely within the landlordís control - there appears to be no discussion of the source of the water in either the majority or the dissent, and it appears that the court assumed that the source of the water was from the area within the control of the tenant.

If a landlord has actual knowledge of a dangerous condition being maintained by the tenant, there is some authority that the landlord must take steps to correct that condition.   Thatís the extent of responsibility.

Here the court concludes that a landlord that was out of possession of the premises, but had an unserved writ of possession pending, had a duty to inspect the premises (apparently on a 24 hour basis) to protect dance hall patrons against wet dance floors.  California law does not give a landlord the right of self help.  But the court argued that the lease gave the landlord the right to come onto the premises and inspect and (apparently) repair.  Here, however, the tenant was in default and being evicted.  Further, it was in blatant violation of the use restrictions by operating the dance club.  Is it logical to believe that the landlord had the practical ability to go on the premises and maintain it?  How, exactly, was that going to be accomplished? 

Well, in light of the fact that the court remanded, it is unlikely weíre ever going to find out, since the case almost certainly will be settled.  But what of the next case?  How does an out of possession landlord with no right of self help and with a tenant that refuses to abide by the lease insure that the premises are safe? Well, there is legal process, but legal process takes time, and in this case the landlord had promptly sought legal process but the time was still running.  What a dilemma? 

There was an appeal, by the way, and the California Supreme Court denied review on August 27.

The Reporter for this item was Professor Roger Bernhardt of the Golden Gate Law School, writing in the California CEB Real Property Reporter.

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