LANDLORD/TENANT; RESIDENTIAL; IMPLIED WARRANTLY OF HABITABILITY; REMEDIES: Tenant who agrees to settle summary possession action by compromising on rent and vacating premises is not collaterally estopped from bringing a subsequent damage action for breach of habitability, even when tenant has raised such breach as a defense to the original summary possession action. Landeros v. Pankey, 46 Cal. Rptr. 165 (Cal. App. 1995)

The tenants apparently had a meritorious claim - the city housing inspector cited the landlord for a number of violations while the summary possession remedy was pending. Perhaps as a consequence of this, landlord agreed to accept less than the demanded rent and permitted tenant one additional month's occupancy before tenant vacated. The parties executed a "stipulation for judgment" on a municipal court form. Tenants had counsel for all of this, but landlord did not.

Eight months later, tenants sued landlord for substantial damages due to brteaches of the implied warranty of habitability for the entire three years they had occupied the premises. Landlord argued that they were collaterally estopped by the consent judgment.

Held: Prior judgment no bar to action for damages here, even though the court acknowledges that the landlord might have believed that the stipulated judgment "resolved all claims and put an end to the relationship between the parties." Although there is California authority that a stipulated judgment can serve as a basis for collateral estoppel, the court here points out that the precedent authority necessarily assumes that the parties to the stipulated judgment intended to resolve all matters in dispute. It points out that there is no such language in the stipulation here, and, because the tenant did not agree to pay the total rent and leave immediately, the tenant obviously was not confessing that there were no habitability defects merely because the tenant settled. Comment 1: Where one side is represented by counsel, and the court acknowledges that the other side could reasonably believe that the settlement agreement counsel negotiated was comprehensive, there would appear to be a strong argument that all uncertainty should be resolved in favor of the unrepresented party. Unfortunately, that party here was the landlord - and one with a clear housing code violation in the record - not a darling of the courts. Comment 2: There is certainly a lesson here for all parties negotiating settlement of disputes in landlord tenant cases. All that boiler plate about "totally releasing any and all claims, known and unkown, etc." is important. Don't leave it out. It seems evident in this case that the landlord was trying to "buy peace." But, perhaps for want of investment in competent counsel, she didn't get what she thought she'd paid for. Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Laprica Mims at the ABA. (312) 988 6233.

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