Landlords and Tenants: Can A Landlord Act Fraudulently And Deceptively But Still Recover For Breach Of The Lease?

In 2016, Defendants Kevin and Beth Sutton and their young daughters (“Tenants”) moved from Washington, DC to Pittsburgh after Mr. Sutton was hired to be the assistant men’s basketball coach for the University of Pittsburgh. Because Mrs. Sutton experienced moderate asthma, and their youngest daughter suffered with severe asthma, the Suttons were very specific and clear with prospective landlords that good air quality was essential for them.

Ultimately, the Suttons found a townhouse managed by Scott and Martha Deaktor (“Landlords”). Knowing of the Suttons’ concerns, the Landlords described this property as their “crowned jewel” and Mrs. Deaktor told them that the air quality was good. Based on what they saw and what the Landlords represented to them, the Suttons signed a lease and moved in.

Shortly after moving in, Mrs. Sutton and her younger daughter started suffering from their asthma. The daughter’s reactions were severe enough to warrant visits to the doctor to develop a plan to minimize her suffering and to control her symptoms. During the middle of June 2016, the Tenants noticed that some of the windows were leaking during rainstorms. They suspected that this moisture infiltration was a root cause that triggered the asthma attacks. On June 21, 2016, the Tenants provided written notice to their Landlords of their desire to terminate the lease early. They also requested that the property be tested for mold. When the Landlords refused to test the property, the Tenants paid for the property to be tested at their own expense. On June 28, 2019, the test results revealed the presence of mold, including toxic mold. On June 29, 2016, the Tenants moved out.

The Landlords sued the Tenants for breach of the lease. The Tenants countersued for breach of the lease, breach of the warranty of habitability, violations of the Landlord Tenant Act, and violations of the Unfair Trade Practices and Consumer Protection Law (“UTPCPL”).

The trial judge found that the Tenants breached the lease by terminating before the end of the term and awarded the Landlords monetary damages and attorneys’ fees and costs totaling $61,860.00. The trial judge also found that the Landlords engaged in both fraudulent and deceptive conduct which was a violation of the UTPCPL. The judge awarded the Tenants the sum of $40,303.06. The trial judge ruled against the Tenants on their other claims. Both parties appealed to the Superior Court and the trial court filed its detailed reasoning.

The case was tried as a bench trial. The judge found that the Landlords knew that several of the windows had been leaking for quite some time. In fact, the leaking was so pervasive that the wood around several of the windows had rotted from the water infiltration. Rather than repair the damaged windows, however, the Landlords painted over the damage, concealing it from the Tenants. Despite being advised of the Tenants’ health concerns, the Landlords failed to disclose that the windows leaked and had been leaking for some time. The judge found that this was a violation of the UTPCPL.

The Landlords’ lease included a procedure to be followed in the event that a Tenant wanted to terminate the lease prematurely. When the Landlords received the Tenants’ request for early termination, they did not advise them of their obligations under that portion of the lease. Instead, the Landlords responded by threatening to declare a default under the lease that would result in penalties to be imposed against the Tenants that would far exceed the early termination fee outlined in the lease. The trial court found this to be a violation of the UTPCPL as well. However, even though the judge held that the Landlords acted both fraudulently and deceptively, the court awarded the Landlords damages for breach of contract in the amount of fifteen thousand nine hundred dollars ($15,900.00), which is equal to the early termination fee required under the lease.

Finally, after the Tenants moved out and had the property professionally cleaned, the Landlords identified several items that they claimed the Tenants either damaged or failed to clean. The trial judge determined that sixteen (16) of those items were false claims made by the Landlords. The court found this to be a third violation of the UTPCPL.

In its opinion, the court reasoned that no caselaw had been provided indicating that a violation of the UTPCPL by the Landlords did not negate or excuse the Tenants’ breaching the lease. It further justified adding an award of attorney’s fees to the Landlords’ claim because the lease permitted the Landlords to sue the Tenants and recover, among other things, court costs and attorney’s fees. According to the trial judge, there is no requirement that the Landlords had to prevail at trial, either in all or in part. The court noted that there was no corresponding right for Tenants to recover their attorneys’ fees. The judge also refused to account for or consider the Landlords’ fraudulent and deceptive conduct that directly influenced the Tenants to sign the lease as in anyway negating the Landlords’ right to recover anything under this lease.

The trial court explained ruling against Tenants on their other claims as follows: “The [Landlords’] deceptive conduct involved on child’s extraordinary sensitivities, but not any breach of the lease. Similarly, a breach in the warranty of habitability does not arise from a condition that impacts only one resident who has extraordinary sensitivities. Deaktor v. Sutton, No. GD 16-12764 (C.P. Allegheny, Oct. 28, 2019); Trial Court Opinion at p.14.

According to the trial court, the multiple instances of fraud and deceptive conduct by the Landlords does not vitiate a residential lease, even when that fraudulent conduct directly lead to the lease being signed. Such bad conduct also, apparently, does not impede a Landlord’s ability to recover for an alleged breach of the lease, even when the lease was signed under fraudulent conditions.

This case is currently on appeal to the Pennsylvania Superior Court

By: Brett M. Woodburn, Esquire

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