Schaefer v. Murphey

Citations: 640 P.2d 857; 131 Ariz. 295; 1982 Ariz. LEXIS 161Docket: 15333

Court: Arizona Supreme Court; January 15, 1982; Arizona; State Supreme Court

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Michael Schaefer (Landlord) filed a civil complaint against Janis F. Murphey (Tenant) in Justice Court on July 21, 1977, seeking $624 in unpaid rent for June and July 1977, plus a $100 pet deposit. To comply with the Justice Court's jurisdictional limit, Landlord waived any claim above $499. Tenant counterclaimed, citing violations of the Arizona Residential Landlord Tenant Act and sought $3,000 in damages, leading to the case being transferred to Superior Court.

After a bench trial, the Superior Court ruled: (1) Tenant owed Landlord $531 for rent; (2) Landlord owed Tenant $956.40, which included $200 for failing to return the security deposit, $132.40 for expenses due to uninhabitable premises, and $624 for unlawful ouster. Landlord appealed the judgment favoring Tenant, raising three issues regarding the evidence supporting the awards for the security deposit, expenses for uninhabitable premises, and unlawful ouster.

A.R.S. 33-1310(13) defines "security" as money or property ensuring payment under a rental agreement, excluding charges for cleaning or redecorating. A.R.S. 33-1321 outlines landlords' obligations regarding security deposits, including limits on the amount collected, requirements for nonrefundable charges to be specified in writing, and conditions for returning deposits after tenancy termination. If a landlord fails to comply, a tenant may recover double the wrongfully withheld amount. The rental agreement specified that the security deposit would be refunded after deducting costs for cleaning and repairs, contingent upon compliance with the agreement's terms.

Cleaning and redecorating deposits are not classified as part of a security deposit under A.R.S. § 33-1310(13). However, the rental agreement included a $40 nonrefundable deposit for carpet and drape cleaning, leading to a total security deposit of $60. At the time of Tenant's departure, she owed $531 in rent, which she did not contest. A.R.S. § 33-1321(C) allows a landlord to apply the security deposit to unpaid rent, requiring written notice to the tenant itemizing amounts due within 14 days post-tenancy. The Landlord failed to provide this notice but argued that filing a civil action for unpaid rent met the statutory requirement. The court disagreed, asserting that such an interpretation would bypass the Arizona Landlord-Tenant Act's provisions. Consequently, Landlord did not comply with § 33-1321(C), and Tenant is entitled to recover the security deposit plus double damages under § 33-1321(D), though not under § 33-1367 due to reasons related to unlawful ouster.

Regarding habitability, Tenant's mother signed the rental agreement on April 5, 1977, for a lease starting April 9, while Tenant was to arrive around June 1. During this period, Landlord was to prepare the apartment, but upon Tenant's arrival, several promised repairs and installations were incomplete, rendering the premises uninhabitable, violating A.R.S. §§ 33-1361(B) and 33-1324. Specifically, the Landlord failed to repair an inoperable toilet despite Tenant's complaints. The trial court found this condition materially affected health and safety, constituting a breach of the landlord's duty under § 33-1324(A)(4). Tenant was entitled to terminate the agreement if the breach was not remedied within ten days of written notice to the Landlord.

Tenant's failure to utilize the remedy outlined in subsection (A) does not bar her from seeking damages under subsection (B), which allows recovery for landlord noncompliance with the rental agreement or related statutes. The trial court awarded Tenant $132.40 for long-distance calls made regarding apartment issues, deemed reasonable due to the landlord's violation of statutory requirements from April 7 until Tenant vacated the premises.

Under A.R.S. 33-1367, tenants can seek remedies for unlawful ouster, defined as either unlawful removal or exclusion from the property or the willful interruption of essential services. The statute allows for recovery of possession or termination of the rental agreement, along with damages not exceeding two months' rent or double actual damages. However, these conditions do not apply to Tenant’s situation. 

Tenant claims unlawful ouster based on alleged retaliatory conduct by the landlord as defined in 33-1381, which prohibits rent increases, service reductions, or eviction threats following tenant complaints. Tenant argues that retaliatory conduct equates to unlawful ouster, yet the court finds these statutes address different actions. There was no evidence presented at trial to substantiate claims of retaliatory actions by the landlord, such as rent increases or threats of eviction. As appellate review is limited to trial record evidence, and since no evidence supported Tenant's claims of unlawful ouster, the court upheld the trial court's decision.

Tenant has requested attorney's fees under A.R.S. 12-341.01, which allows courts to award reasonable fees to the successful party in both trials and appeals, as established in Wenk et ux. v. Horizon Moving, Storage Co. Tenant must follow Rule 21 of the Arizona Rules of Civil Appellate Procedure if she believes she qualifies for these fees. The trial court's judgment concerning the security deposit has been reversed and remanded for further proceedings. The court affirmed the trial court's award of damages to Tenant for the Landlord's failure to provide habitable premises, but reversed the finding of unlawful ouster due to lack of evidence. Justices Struckmeyer and Cameron concurred with the decision.