Landlord and Tenant--implied warranty of habitability--breach--
calculation of damages
There was competent evidence in a nonjury trial to support
the trial court's findings and conclusions that plaintiff
breached the implied warranty of habitability; however,
defendant's damages were improperly calculated.
Harkey, Lambeth, Nystrom, Fiorella & Morrison, L.L.P., by
Jeffrey S. Williams-Tracy, for plaintiff-appellant.
Legal Services of Southern Piedmont, Inc., by Linda S. Johnson
and Theodore O. Fillette, for defendant-appellee.
WALKER, Judge.
Plaintiff was the owner of residential premises located at
1005 Andrill Terrace (the premises) in Charlotte (the City).
Defendant has lived at the premises since 1992 pursuant to a series
of oral leases. On 10 September 1999, plaintiff entered into a
written lease with defendant agreeing to pay a monthly rental rate
of $360 due on or before the first day of each month. Beginning in
November 1999 and continuing through 31 January 2000 when plaintiff
sold the premises, the premises had certain defects which violated
the City's Housing Code. These defects included unsafe electrical
wiring, which caused defendant an insufficient supply of electrical
power, often rendering useless the premises' heat, hot water, and
appliances. During this time, defendant's payment of rent was notalways timely.
On 22 December 1999, plaintiff received a complaint and notice
of hearing from the City regarding violations of the housing code
on the premises. That same day, plaintiff filed a complaint for
summary ejectment against defendant for breach of the lease by
nonpayment of rent. On 11 January 2000, defendant answered and
counterclaimed, alleging breach of implied warranty of habitability
and unfair or deceptive trade practices.
After the small claims court found for plaintiff, defendant
appealed to the district court. By judgment dated 14 June 2000,
the district court concluded plaintiff had breached the implied
warranty of habitability and committed “unfair or deceptive acts in
commerce in violation of N.C.G.S. § 75-1.1 et. seq. . . .” The
district court thus dismissed with prejudice plaintiff's claim for
summary ejectment and ordered plaintiff to pay defendant damages in
the amount of $880, which was trebled to $2,640. Costs of the
action were further taxed to plaintiff.
Plaintiff contends the district court erred in finding
plaintiff had breached the implied warranty of habitability owed to
defendant. Plaintiff further contends the district court erred in
its calculation of damages and in finding that plaintiff committed
unfair and deceptive acts, thereby trebling defendant's damages.
Defendant contends the district court properly determined she
was entitled to damages from November 1999 through January 2000 for
breach of the implied warranty of habitability, refund of unlawful
rent and unfair acts and deceptive practices. Defendant further
asserts that under this Court's recent decision of Von PettisRealty, Inc. v. McKoy, 135 N.C. App. 206, 519 S.E.2d 546 (1999),
disc. review denied, 351 N.C. 371, 542 S.E.2d 661 (2000), the trial
court utilized the proper method for calculating her damages.
At the outset, we note the standard of review for bench
trials:
In all actions tried without a jury, the trial
court is required to make specific findings of
fact, state separately its conclusions of law,
and then direct judgment in accordance
therewith. It is well settled law that
although the sufficiency of the evidence to
support the trial court's findings may be
raised on appeal, the 'appellate courts are
bound by the trial courts' findings of fact
where there is some evidence to support those
findings, even though the evidence might
sustain findings to the contrary.'
Chicago Title Ins. Co. v. Wetherington, 127 N.C. App. 457, 460, 490
S.E.2d 593, 596, disc. review denied, 347 N.C. 574, 498 S.E.2d 380
(1998)(citations omitted), quoting In re Montgomery, 311 N.C. 101,
110-111, 316 S.E.2d 246, 252-253 (1984).
This Court has held:
[T]he proper measure of damages in a rent
abatement action based on a breach of the
implied warranty of habitability is the
difference between the fair rental value of
the property in a warranted condition and the
fair rental value of the property in its
unwarranted condition; provided, however, the
damages do not exceed the total amount of rent
paid by the tenant. Additionally, the tenant
is entitled to any 'special and consequential
damages alleged and proved.'
Von Pettis Realty, Inc. at 210, 519 S.E.2d at 549, quoting Cotton
v. Stanley, 86 N.C. App. 534, 537, 358 S.E.2d 692, 694, disc.
review denied, 321 N.C. 296, 362 S.E.2d 779 (1987). In its order, the trial court made the following findings in
part:
4. Plaintiff knew of these defects, as the
defects were reported by defendant. Plaintiff
made repairs, but the electrical problem
recurred.
5. This defect [has] seriously affected the
use and enjoyment of the premises by
defendant. The fair rental value of the
premises as provided by plaintiff to defendant
was no more than $200.00 per month for the
months of November 1999 and no more than
$100.00 per month for the months of December
1999 and January 2000. If the defects had all
been repaired and the premises had been in the
condition required by law, the fair rental
value would have been $360.00 per month.
6. The unsafe wiring and the lack of an
operable lock on the bathroom window rendered
the premises 'immediately dangerous to health
and safety' as defined by Section 11-35(d) of
the Housing Code of the City of Charlotte,
which was enacted November 9, 1998. From
December 1998 through December 1999, plaintiff
collected $4420.00 in rent from defendant.
7. Plaintiff continued to demand rent for
the premises in its substandard condition, and
this action was unethical, oppressive, and
substantially injurious to the defendant.
8. During the tenancy, plaintiff collected
rent by going to the premises and receiving
the payments directly from defendant, usually
on a weekly basis. Plaintiff refused to
accept any payments from defendant after
receiving the Complaint and Notice of Hearingfrom the housing inspector on December 22,
1999, though the balance of rent for December
was tendered by defendant.
The trial court then concluded in part:
Based on these conclusions, the trial court ordered that defendant
recover $360 for November 1999 and $260 per month for December 1999
and January 2000 for breach of implied warranty of habitability.
The trial court further ordered that these amounts be trebled such
that plaintiff's recovery amounted to $2,640.
We conclude from a review of the record there is competent
evidence to support the trial court's findings and conclusions that
plaintiff breached the implied warranty of habitability of thepremises and defendant is entitled to damages. However, after
further review, we conclude the trial court improperly calculated
defendant's damages in the following respects: (1) For November
1999, the trial court determined the fair rental value for this
month to be $200. Defendant paid rent for this month in the amount
of $360, leaving defendant's damages at $160; (2) For December
1999, the trial court determined the fair rental value for this
month to be $100; however, defendant only paid rent in the amount
of $100. Defendant was therefore not entitled to damages for this
month; and (3) For January 2000, the trial court determined the
fair rental value for this month to be $100; however, defendant did
not pay any rent. Thus, $100 should be offset against defendant's
damages for this month.
Therefore, the portion of the judgment awarding damages is
reversed and the case is remanded to the trial court for a
determination of defendant's damages consistent with this opinion.
Affirmed in part; reversed and remanded in part.
Judges MCCULLOUGH and SMITH concur.
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