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White River Estates v. Hiltbruner

December 23, 1996

WHITE RIVER ESTATES, APPELLANT,
v.
KAREN HILTBRUNER, RESPONDENT, CERRITOS INVESTMENT CORPORATION, A CALIFORNIA CORPORATION, DOING BUSINESS IN WASHINGTON AS WHITE RIVER ESTATES AND ANNA HWANG, APPELLANTS.



Appeal from Superior Court of King County. Docket No: 93-2-07909-5. Date filed: 02/07/95. Judge signing: Hon. Carol Schapira.

Petition for Review Granted September 4, 1997,

Authored by H. Joseph Coleman. Concurring: Walter E. Webster, Ronald E. Cox.

The opinion of the court was delivered by: Coleman

COLEMAN, J. -- Karen Hiltbruner, a secured party of a mobile home, sued the mobile home park owners, Cerritos Investment Corporation and their manager, Anna Hwang, alleging that the Park unreasonably rejected her potential home purchasers. Hiltbruner prevailed following a jury trial and the Park appeals. The Park argues that as a secured party, Hiltbruner had no transferable or assignable rental agreement and that she failed to give the statutorily required 15-day advance notice of any intended transfer. We reject these claims because a secured party's relationship with the landlord is governed by the prior tenant's lease, which permitted assignments and because the Park waived its right to a 15-day notice by failing to reject the potential buyers on that basis. The Park also claims that the court allowed plaintiff to relitigate a back rent issue resolved by settlement in a separate unlawful detainer action. We hold that the settlement did not resolve this issue. Finally, the Park argues that the court erred by instructing the jury that it should consider emotional distress in calculating damages for claims brought under RCW 59.20.073. We hold that such damages are recoverable because the violation was in the nature of an intentional tort. We affirm.

FACTS

In February 1992, the Park began a collection suit against Hiltbruner for unpaid rent on her mobile home. In May 1992, Hiltbruner filed cross claims in the collection suit against the Park for tortious interference, intentional and negligent infliction of emotional distress, and violations of the Mobile Home Landlord-Tenant Act (MHLTA), the Consumer Protection Act, the U.S. Civil Rights Act, and the Washington State Constitution. *fn1 In October 1992, the Park filed an unlawful detainer action. In November 1992, Hiltbruner and the Park reached an agreement in the unlawful detainer action whereby Hiltbruner paid back rent. A trial was subsequently held to resolve Hiltbruner's cross claims in the collection suit.

Before trial, the Park moved to exclude any evidence relating to the settlement agreement between Hiltbruner and the Park in the unlawful detainer action. That agreement stated that "the sum of $6,465.00 is stipulated and agreed to be the amount of rent for Space 502[.]" The agreement also stated that "except as provided in this Agreement, [the parties] shall have all rights pursuant to law from this point forward[.]" The agreement distinguished those parts of the stipulation that were settled with and without prejudice: "The parties shall dismiss their claims in the Unlawful Detainer Action without prejudice, except for the parties' claims for attorneys fees and costs . . . and except for any claims asserted by Cerritos for monies due through November 30, 1992, which claims shall be dismissed with prejudice."

Another document referred to at trial but not admitted into evidence stated that Hiltbruner was specifically not waiving any right to recover an overpayment. The parties disputed this letter's meaning. Hiltbruner claimed that she was retaining her right to pursue the facts underlying the back rent issue but that she paid the back rent to remain in the Park until her cross claims were resolved. The Park argued that this provision referred only to possible accounting errors. The court permitted Hiltbruner to pursue issues relating to the settlement agreement to the extent consistent with the settlement letter.

The following facts were adduced at trial. Hiltbruner purchased and resided in a mobile home in White River Estates Mobile Home Park from 1979 to 1987. White River Estates is owned by Cerritos Investment Corporation and managed by Anna Hwang. In 1988, Hiltbruner sold the mobile home to Deborah and Bret Brunelle. The sale was financed through a loan from Hiltbruner to the Brunelles. Under their agreement, Hiltbruner retained a security interest in the mobile home, which enabled her to repossess the home in the event of default by the Brunelles. White River approved the Brunelles' tenancy, and the Brunelles signed a lease with White River under which they paid monthly rent directly to the Park. The lease contained a standard provision regarding assignability:

17. ASSIGNMENT. This Rental Agreement shall be assignable by Tenant only to a person to whom Tenant sells or transfers title to the mobile home on the Mobile Home Lot, subject to the approval of Landlord after fifteen (15) days written notice by Tenant of such intended assignment. Landlord shall approve or disapprove of the assignment of this Rental Agreement on the same basis that Landlord approves or disapproves of any new tenant or mobile home. Tenant's assignee shall assume all the duties and obligations of Tenant for the remainder of the term of this Rental Agreement.

In early 1990, the Brunelles defaulted on their rental agreement. In November 1990, White River sent Hiltbruner a letter informing her that she was liable for the back rent owed by the prior tenants as the secured party under RCW 59.20.074. *fn2 Hiltbruner and the Park had not entered into a separate rental agreement upon her repossession of the property. Hiltbruner testified that she called the Park's attorney to find out for what the Park was billing her. She testified that she never received an adequate response and that, despite her requests, she also never received a copy of the rental agreement between White River and the Brunelles. The parties disputed the amount of rent owed, and Hiltbruner paid no rent during this time.

The Brunelles moved out of the mobile home in January 1991 leaving the home substantially damaged. Hiltbruner spent the next few months repairing the home. Hiltbruner also attempted to sell the mobile home. Several potential buyers who made offers to Hiltbruner and whose offers Hiltbruner approved applied to the Park for approval to lease the mobile home. None were accepted.

At trial, the parties disputed why the Park had denied these potential buyers. Hwang testified that the Park applied a "brightline rule" screening criteria that included a first step of rejecting all potential buyers who had blemishes on their credit reports. Hwang testified that nearly every potential buyer failed the first step. Hiltbruner argued that the "brightline rule" did not exist because people with less than perfect credit reports were approved to lease other mobile home spaces in the Park. Hiltbruner presented evidence that the failure to sell her home and the eviction suit by the Park caused stress in her family relationships, sleeplessness, and irritability.

Later in the trial, Hiltbruner sought to exclude the settlement agreement in the unlawful detainer action. The Park argued that the document should be admitted. The court reasoned that if the document were admitted, attorneys from both sides would have to testify as to the meaning of the document. The court excluded the document, believing that it would delay trial and confuse the jury.

The MHLTA instruction provided in part, "Any rental agreement shall be assignable by the tenant to any person to whom he sells or transfers title to the mobile home. . . . Consent to an assignment shall not be unreasonably withheld." Additionally, the court instructed the jury that it should consider emotional pain and suffering experienced or to be ...


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