Stevan v. Brown

Adkins, J., delivered the opinion of the Court. The principal question presented in this case is whether tenants who claim constructive eviction but have notified their landlords that, on account of their landlords’ conduct, they intend not to take advantage of their lease’s renewal term, may sue the landlords for damages arising from loss of ²³⁷ the renewal term. Since our answer is "it depends”, we hold that the Superior Court of Baltimore City erred in granting summary judgment for the landlords. We also hold that the trial court erred in granting summary judgment on but one issue raised in an action for declaratory and other relief, without making a full declaration of the rights and status of the parties.

The factual framework of the controversy is as follows: In 1963, appellants, members of a law firm (tenants) leased a suite of offices in Baltimore from which to conduct their law practice. Apparently they found these premises to their liking, since they executed a new lease of the same suite on July 31, 1973. This 1973 lease, which is involved in the instant case, was for a five-year term from November 1, 1973. In paragraph 27, it provided for an automatic five year renewal term from November 1, 1978, to October 31, 1983, "unless the Tenant shall give the Landlord notice in writing of its intention not to renew the lease on or before April 30, 1978, and no later.” The appellees (landlords) became successors in interest to the original landlord. 1 All did not go well under the 1973 lease.

In April 1977, tenants sued the individual landlords in the Superior Court of Baltimore City, adding the corporate landlord by subsequent amendment. Tenants complained of janitor service that was "erratic and, at its best, poor”; inadequate cleaning of men’s and women’s toilets; accumulation of bird droppings; "near manic” elevator service; lack of heat; lack of hot water; and other deficiencies in services they claimed landlords were bound to supply, presumably under paragraph 11 of the lease and under the covenant of quiet enjoyment contained in paragraph 28. In their suit, tenants sought a declaratory judgment holding that the lease had been substantially breached by landlords and, therefore, that the lease was terminated. Tenants also asked to be ²³⁸ allowed to remain in the premises for six months or until they could locate new quarters, and they requested both punitive and compensatory damages, including in the latter damages caused by loss of their five year renewal option. 2 On April 4, 1978, tenants wrote landlords: Because of the wrongful conduct of [landlords] as set forth [in the pending suit], the Tenant is compelled to and does hereby give notice to the Landlord, pursuant to paragraph 27 of the lease dated July 30, 1973, between the Landlord and the Tenant for the occupancy of the premises ... of the Tenant’s intention not to renew the term of the said lease for an additional five years commencing on November 1, 1978.

In October 1978,. at the end of the original term of the lease, tenants moved to a new location. , The landlords filed the second of their two motions for summary judgment on March 1, 1982. They claimed that they were entitled to prevail on. the issue of liability for the loss (or relinquishment) of the option to renew: On April 19, 1982, the Superior Court of Baltimore City granted landlords? motion, and entered judgment absolute for costs in favor of the landlords in the entire case. The trial judge explained: The issue raised by [landlords’] motion for summary’ judgment is that [tenants] having declined the renewal term are not entitled to damages based on the difference between the rental value of the property during the renewal term and' the rent provided for in the lease.... The [tenants] have taken an inconsistent position.

Albeit I understand ²³⁹ they maintained they were forced to remain in the premises during the original term, even though they had ground for constructive evictions because they feared suit by the landlord. Albeit they maintained that they declined the renewal under protest. It is inescapable that their conduct in declining the renewal term and seeking damages based on the renewal term are fatally inconsistent... . The [tenants] had the right, if they are correct in their position, to leave the premises before the termination of the original term.

If they are correct, they had the right to leave the premises without declining the renewal term. And had they done so, they could have litigated the issue of the constructive eviction. But they did neither. They did not vacate the premises prior to the end of the original term and they ... voluntarily made the decision to decline the renewal term.

It was not a decision made under duress. It was a voluntary decision. They argued they had no alternative. But, that is inaccurate.

The clear alternative, and that which they were required to do is to leave the premises without declining the renewal term. This decision was erroneous. It was erroneous because, inter alia, the trial judge, on a motion for summary judgment, made factual determinations or drew inferences which might have been appropriate for a fact finder at trial, but which were not proper on a motion for summary judgment. Barb v. Wallace, 45 Md. App. 271, 275 , 412 A.2d 1314, 1316 (1980).

As we pointed out in Delia v. Berkey, 41 Md. App. 47, 51 , 395 A.2d 1189, 1192 (1978), aff'd. 287 Md. 302 , 413 A.2d 170 (1980): The Court of Appeals on numerous occasions has stated that the function of the summary judgment procedure is not to try the case or decide the issues of fact raised; it is merely to determine whether ²⁴⁰ there is an issue of fact to be tried, and if there is none, to cause judgment to be issued accordingly, [citations omitted]. In ruling on a motion for summary judgment, the inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion, and even if it is found unlikely that the party opposing the motion will prevail at trial, this is insufficient to authorize a summary judgment, [citations omitted]. Why it was incorrect to grant landlords’ motion for summary judgment becomes apparent when one reviews the legal theories underlying tenants’ case. Constructive Eviction Tenants’ fundamental position is that they were constructively evicted by landlords.

A constructive eviction occurs when the acts of a landlord cause serious or substantial interference with the tenants’ enjoyment of the property which results in the tenant vacating the premises. A. Rhynhart, "Notes on the Law of Landlord and Tenant”, 20 Md. L.R. 1, 23-24 (1960). These acts must be done by the landlord with the intent and effect of depriving the tenant of the latter’s use and enjoyment. McNally v. Moser, 210 Md. 127 , 122 A.2d 555 (1956).

But the requisite intent may be inferred from the nature and impact of the acts. Thus, failures to furnish heat, elevator service, and necessary electricity have been held adequate to support a claim of constructive eviction, Chas. E. Burt, Inc. v. Seven Grand Corp., 340 Mass. 124 , 163 N.E.2d 4 (1959); as have the failure to furnish sanitary restroom facilities (along with other problems), Thirteenth and Washington Sts. Corp. v. Nelson, 123 Utah 70 , 254 P.2d 847 (1953); and frequent flooding of the premises because of the landlord’s fault, Reste Realty Corp. v. Cooper, 53 N.J. 444 , 251 A.2d 268 (1969).

Of course, every instance of nonperformance by a landlord does not necessarily support constructive eviction in fact or in law, Biggs v. McCurley, 76 Md. 409 , 25 A. 466 (1892); ²⁴¹ Schaaf v. Nortman, 19 Wis.2d 540 , 120 N.W.2d 654 (1963). Moreover, a tenant who claims constructive eviction may waive his rights if he waits an unreasonable length of time before vacating the premises. McNally v. Moser, Reste v. Cooper, Burt v. Seven Grand, and Thirteenth and Washington v. Nelson, all supra; Thompson v. Poirier, 120 N.H. 584 , 420 A.2d 297 (1980). But a tenant generally may not claim constructive eviction until such time as he actually vacates the premises.

Chicago v. American Nat’l Bank, 86 Ill. App.3d 960 , 408 N.E.2d 379 (1980). Also Burt v. Seven Grand Corp.; Thirteenth and Washington Sts. Corp. v. Nelson, both supra.

When these principles are applied in the instant case, an unusual situation presents itself. The appellants admit that their abandonment of the premises "for all practical purposes . .. was coincident with the fend of the] term of the lease....” While it has been held that "abandonment of the leased premises is not essential to seeking equitable relief,” Burt v. Seven Grand Corp., supra, 340 Mass, at 129, 163 N.E.2d at 7 , (citation omitted), appellants sought relief in an action at law. Therefore, constructive eviction offers no opportunity for relief regarding their term of rental under the 1973 lease. But they are not necessarily precluded from asserting constructive eviction regarding their option to renew, since they did abandon the leased premises before they would have occupied under that option.

Among the relevant considerations in resolving this issue is the reasonableness of their delay in abandonment, which is usually a question of fact, not law. Giddings v. Williams, 336 Ill. 482, 486 , 168 N.E. 514, 516 (1929). But in the present posture of this case, we, like the trial judge ruling on the motion for summary judgment, need not, indeed cannot, decide whether the deficiencies charged by tenants were of sufficient seriousness, frequency, and duration to amount to constructive eviction. And we neither need nor can decide whether tenants waived their constructive eviction rights by remaining in the premises too long.

No trial was held and no evidence was introduced ²⁴² as to these matters. Suffice to say that "the pleadings, depositions, and ... affidavits” filed in the case showed genuine disputes of material facts as to these issues. Md. Rule 610. Thus, the merit of tenants’ constructive eviction claim could not properly have been disposed of on summary judgment.

Right of Constructively-Evicted to Claim Damages for Loss of Renewal Term We have established that there were triable issues as to constructive eviction. Tenants next argue that if, at trial, they should succeed on this point, then they can recover damages for the five year renewal term of the lease that they lost when they were constructively evicted. We think this argument is legally sound, if their inability to enjoy the benefit of the renewal is established to be the result of the constructive eviction. The concept is simply that if landlords breached the lease, they cannot rely on their own wrongful act to escape liability under a lease provision the performance of which they have prevented by that wrongful act.

Constructive eviction is most commonly raised as a defense to a landlord’s action for rent. See Reste Realty Corp. v. Cooper; Thirteenth and Washington Sts. Corp. v. Nelson, both supra. But constructive eviction may provide a litigant with a sword, as well as a shield.

In Thompson v. Poirier, supra, the Supreme Court of New Hampshire upheld an award to a plaintiff, whose action was based on constructive eviction, of moving expenses, lost profits 3 and attorney fees. In Burt v. Seven Grand Corp., supra, the Supreme Judicial Court of Massachusetts ruled that a plaintiff could recover past damages for constructive eviction, and implied that future damages could also be recoverable, if the plaintiff were to raise properly the issue. In Weighley v. Muller, 51 Pa. Super.

Ct. 125, 132 (1912), it was held that ²⁴³ If the tenant was evicted by the landlord or by acts equivalent to an eviction was deprived of his pecuniary interest under the lease, he was entitled to recover as damages the loss suffered by him — to be put in the same position pecuniarily as he would have been if the contract had been kept — when the damages are the natural result of such breach of contract and can be ascertained with reasonable certainty. Persuasive analogy of constructive eviction to other types of wrongful conduct on the part of landlords strengthens the tenants’ claim in this case. In Nelson v. Reisner, 51 Cal.2d 161 , 331 P.2d 17 (1958), a tenant had the right of first refusal of the renewal of his lease. The landlords submitted a first refusal proposal which contained exorbitant terms and which the trial court found was not in good faith.

The tenant rejected it. The Supreme Court of California held that the tenant had not waived the right of first refusal by rejecting the landlord’s bad faith offer. It observed that if a party to a contract prevents its performance by the adverse party, the errant party cannot rely on the nonperformance to escape liability. Fullington v. M. Penn Phillips Co., 238 Or. 321 , 395 P.2d 124 (1964) was a case in which the tenant had a three-year lease with an