Oral Argument January 21, 2015
[Copyrighted Material Omitted]
Appeal from King County Superior Court. Docket No: 13-2-20222-1. Judge signing: Honorable Judith H Ramseyer. Judgment or order under review. Date filed: 09/17/2013.
Evan L. Loeffler, Christopher D. Cutting, and Jeana K. Poloni (of Loeffler Law Group PLLC ), for appellant.
Elisabeth Pualani Lindsley ; and Gary Manca (of Manca Law PLLC ), for respondents.
Steven R. Rovig and Jacob M. Wicks on behalf of King County Bar Association, amicus curiae.
Authored by Michael S. Spearman. Concurring: Mary Kay Becker, Linda Lau.
Michael S. Spearman, C.J.
[187 Wn.App. 821] ¶ 1 Landlord Lang Pham brought this unlawful detainer action against tenants Shakia Morgan and Shawn Corbett (Tenants). The Tenants counterclaimed for relocation assistance under RCW 59.18.085 and raised defenses of setoff and breach of implied warranty of habitability. The trial court found that Pham had breached the implied warranty and awarded damages and relocation assistance to the Tenants. Pham appeals, disputing the trial court's findings of fact, the Tenants' entitlement to damages, and their right to bring counterclaims in an unlawful detainer action. Finding no error, we affirm the decision of the trial court.
[187 Wn.App. 822]FACTS
¶ 2 Lang Pham purchased the residential property located at 9312 51st Avenue South, Seattle, Washington (Property), at a foreclosure sale in March 2012. Pham owns and rents other apartment buildings. The Property was metered for five living units, so Pham had assumed it met regulatory requirements for use as a fiveplex. But the Property was permitted only for use as a triplex. Renting the building as a fiveplex violated city land use and building codes. Pham repainted, installed new carpet, and refinished the floors, but did not verify the building's permit status before renting the five units. The permit information could easily have been accessed through the King County assessor and the website of the city of Seattle's, Department of Planning and Development (City).
¶ 3 On April 25, 2012, Pham and Shawn Corbett and Shakia Morgan entered into a one-year lease agreement for unit 5 (Unit) of the Property, for May 1, 2012 through April 30, 2013. The Tenants were required to pay $850 rent on the first of each month. They paid the first and last month's rent and a security deposit of $650, for a total of $2,350.
¶ 4 The tenancy presented a number of difficulties. The Tenants' income varied, and they often paid their rent late or in installments. They complained to Pham about the Unit's conditions, including the absence of baseboards; holes and gaps between the floor, walls, and doors; lack of railings on an outside deck and stairs, leaking water/sewage in a large " crawl space; " and the stench of sewage coming from the bathroom sink. Pham characterized the Tenants' complaints as " playing this game" and arising only when rent was due. Verbatim Report of Proceedings (VRP) at 64-65; 68. In contrast, the Tenants said that Pham would tell them to address the issues themselves or would fail to address their concerns at all.
¶ 5 In August 2012, the Tenants notified Pham that they had seen a rat in the Unit. Pham hired an exterminator to [187 Wn.App. 823] inspect and treat the Property for rodents and insects on a quarterly basis. The exterminator came twice to spray and set traps. Because the exterminator did not see evidence of rats,
Pham discontinued the scheduled quarterly visits and opted for annual visits. The Tenants continued to see and hear rats in the Unit, and caught several rats using traps they purchased and placed themselves.
¶ 6 The Tenants had paid rent in full through April 2013, when the lease expired. The lease provided that the Tenants would be liable for rent and other damages sustained as a result of any holdover. The Tenants did not make any subsequent rent payments and were still in possession of the Unit at the time of trial in July 2013. Because the Tenants did not make payment or payment arrangements for May 2013, Pham testified that he posted and mailed a three-day pay or vacate notice on May 6, 2013, but the Tenants denied receiving it.
¶ 7 On May 10, 2013, the Tenants filed a complaint with the City regarding the Unit's conditions. Five days later, city housing and zoning inspector Tom Bradrick, inspected the Unit. Bradrick found that " the overall quality of the installation of the unit was very poor and would never have passed a building inspection at that time. ..." VRP at 114.
¶ 8 On May 16, 2013, the day after the inspection, Pham served the Tenants with another three-day pay or vacate notice. The next day Bradrick mailed a notice of violation to Pham's home address notifying him that the Property was not permitted for use as a fiveplex and that he needed to take corrective action by June 30, 2013. Pham testified that he did not receive this letter until May 22, 2013, five days later.
[187 Wn.App. 824] ¶ 9 On Monday, May 20, 2013, Pham filed an unlawful detainer action to evict the Tenants because they failed to comply with the May 16, 2013 pay or vacate notice.
¶ 10 Bradrick sent a follow up letter on Wednesday, May 22, 2013, notifying Pham that the Property must be brought into compliance or the City would require him to pay relocation assistance of $2,000. The letter also advised Pham that multiple repairs would be required before permitting the Unit, and that the sewage leak would need to be repaired immediately.
¶ 11 On June 6, 2013, Bradrick sent Pham a third letter listing specific repairs that needed to be done in order to obtain a permit and pass a housing inspection. These repairs included the sewage leak, the absence of a P-trap in the vanity drain under the bathroom sink, and the rodent access to the crawl space and bedroom closet. The letter again instructed Pham that if he did not make the necessary repairs, he would need to discontinue renting the Unit and pay $2,000 in relocation assistance. Pham hired an architect to work on permitting the Property for use as a fiveplex. At the time of trial, because Pham was still waiting to find out whether such use would be permittable, none of the other repairs had been made.
¶ 12 A bench trial was held on July 17, 2013. The parties presented testimony from five witnesses: Pham, Eric Bittenbender from Paratex Pest Control, Bradrick, Morgan, and Corbett. The trial court found that the Unit's habitability had been reduced by 25 percent for the nine-month period in which the Tenants lived with the sewer and rodent issues. The trial court determined that the Tenants had [187 Wn.App. 825] overpaid rent for that period, but also that they owed rent because they remained in the Unit for two additional months without paying. The Tenants ...