SCOVT affirms punitive damage award against landlord; reverses and remands compensatory award for further findings

Soon K. Kwon v. Eric Edson and Dina Well, 2019 VT 59 [filed 8/23/2019]

CARROLL, J. In this landlord-tenant dispute, following a bench trial, the court granted tenant Edson damages to compensate him for work he performed on landlord’s properties and tenant Well compensatory and punitive damages for breach of the implied warranty of habitability and illegal eviction.

Landlord appeals, arguing that the court erred in (1) finding that there was an oral rental agreement between the parties and that defendants were tenants; (2) awarding rent for only a portion of the period tenants occupied the property; (3) awarding tenant Edson damages because the claim was not properly pled; and (4) awarding tenant Well punitive damages.

Tenants cross appeal, arguing that the court abused its discretion in finding there was an agreement to pay rent once the building was compliant with the housing code and erred in awarding landlord back rent based on a theory of unjust enrichment. We affirm in part and reverse and remand in part

  

We conclude that the evidence supports the court’s finding that the parties entered an oral agreement allowing tenants to stay in landlord’s apartment rent-free for some portion of time. However, because the court’s findings as to the terms of the contract are not supported by the evidence, we cannot determine if a remedy for unjust enrichment would be appropriate in this case. Therefore, the award of back rent and electricity to landlord is reversed and the matter is remanded for the court to make new findings based on the evidence presented at trial as to the terms of the parties’ agreement. Based on these findings, the court can determine if damages are appropriate either pursuant to an oral contract or as an equitable remedy for unjust enrichment.

  

We affirm the court’s award of damages to tenant Edson for the work he performed for landlord, concluding that the issue was tried by implied consent.

Finally, we conclude that an award of punitive damages was allowable as damages for breach of the warranty of habitability and affirm the award of punitive damages to tenant Well. There was sufficient evidence of willful and wanton conduct for the court to make an award of punitive damages.

• The trial court found that after being notified about habitability issues in the apartment, landlord took far more than a reasonable time to address those issues. See 9 V.S.A. § 4458(a) (allowing tenant to recover damages where landlord fails to make repairs “within a reasonable time”).
•  Landlord took seven days to fix the heat issue when a reasonable amount of time was two days.
• Landlord took nine days to address the lack of water when a reasonable time was twenty-four hours.
• Moreover, landlord did not offer to pay for tenant Well to stay in a hotel room while the apartment was not habitable until he was told by code enforcement that he had to do so.
• Landlord also used propane heaters in the basement of the apartment, which posed a serious fire hazard and a risk of carbon-monoxide poisoning.
• Landlord fraudulently represented to the city that the apartment was not occupied so he could avoid providing tenant with lead-paint notices.
•  Finally, landlord resorted to self-help by having Well’s car towed on two occasions to force her out of the premises without a court eviction order while the eviction proceedings were pending.

These facts are sufficient to show willful and wanton conduct and support an award for punitive damages