BILL ANALYSIS Ó
AB 969
Page 1
Date of Hearing: May 7, 2013
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
AB 969 (Ammiano) - As Introduced: February 22, 2013
SUBJECT : LANDLORD AND TENANT: UNLAWFUL DETAINER
KEY ISSUES :
1)IN AN UNLAWFUL DETAINER CASE, SHOULD DETERMINATIONS OF FACTUAL
QUESTIONS OF HABITABILITY BE MADE BY THE TRIER OF FACT,
WHETHER A JUDGE OR JURY?
2)SHOULD IT BE CLARIFIED THAT EXISTING LAW PROVIDES TENANTS THE
RIGHT TO PRESENT EVIDENCE OF RETALIATION IN UNLAWFUL DETAINER
CASES, WHETHER OR NOT THE LANDLORD HAS ALLEGED NON-PAYMENT OF
RENT?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
This bill, sponsored by the East Bay Community Law Center, seeks
to clarify two sections of law that help protect tenants facing
eviction where habitability or retaliation are possible defenses
in the case. First, this bill would establish that habitability
determinations, which are questions of fact, shall be made by
the trier of fact in an unlawful detainer case. In other words,
the bill simply clarifies that the jury, if there is one, shall
consider factual questions of habitability in the case, if any
such questions arise. If there is no jury, then the judge as
the trier of fact shall make such determinations. Second, this
bill would clarify that under Civil Code Section 1942.5 (c),
tenants have the right to present evidence of retaliation in an
unlawful detainer case, whether or not the landlord has alleged
non-payment of rent. In addition, this bill seeks to clarify
the meaning of the term "in default" of rent under Section
1942.5(a), to distinguish lawful instances of non-payment of
rent from true cases of default where the tenant has no
justification for failing to pay rent. The bill is supported by
tenant advocates and legal aid providers, who contend that the
bill's proposed clarifications are necessary to ensure
consistent application of landlord-tenant laws that are often
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misread or misapplied to the detriment of tenants. The bill is
opposed by a number of apartment associations and landlord
groups, who contend that these clarifications are unnecessary
and create unfair presumptions in the law. Opponents also
contend that the bill encourages jury trials in cases where
habitability is a defense, which will add months of delay to
what are supposed to be summary proceedings and will increase
costs and burdens upon the courts.
SUMMARY : Clarifies existing law regarding unlawful detainer
where retaliation or habitability of the premises may be an
issue in the case. Specifically, this bill :
1)Provides that, in an unlawful detainer proceeding involving
residential premises after default in payment of rent and in
which the tenant has raised as an affirmative defense a breach
of the warranty of habitability, the jury, or the court, if
the proceeding is tried without a jury, shall determine
whether a substantial breach of these obligations has
occurred.
2)Clarifies that the retaliation defense available to tenants in
subdivision (c) of Civil Code Section 1942.5 is not limited by
any provisions of, or conditions that apply to, the limited
presumption of retaliation described in subdivision (a) of
Section 1942.5.
3)Clarifies the meaning of "default" with respect to the limited
presumption of retaliation described in subdivision (a) of
Section 1942.5, which applies only if the tenant is not in
default on the payment of rent; specifically, that the tenant
is not in default as to payment of rent when either of the
following conditions are met:
a) The tenant has made all rent payments due or has
exercised his or her right to deduct an amount from or
withhold the payment of rent pursuant to Section 1942.
b) The landlord is prohibited from collecting rent pursuant
to Section 1942.4.
EXISTING LAW :
1)Provides, generally, that a landlord must keep residential
premises in a condition fit for human occupation. (Civil Code
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Section 1941.)
2)Provides that the breach of any warranty of habitability
(implied or express) is a defense to an unlawful detainer
action filed to recover possession or residential premises
based on nonpayment of rent. (Green v. Superior Court (1974)
10 Cal. 3d 616.)
3)Provides that in an unlawful detainer proceeding in which the
tenant has raised as an affirmative defense a breach of the
landlord's obligations under Section 1941 of the Civil Code or
of any warranty of habitability, the court shall determine
whether a substantial breach of these obligations has
occurred. (Code of Civil Procedure Section 1174.2.)
4)Provides that whenever an issue of fact is presented by the
pleadings, it must be tried by a jury, unless the jury has
been waived. (Code of Civil Procedure Section 1171.)
5)Provides that if the lessor retaliates against the lessee
because of the exercise by the lessee of his rights under this
chapter or because of his complaint to an appropriate agency
as to tenantability (also known as "habitability") of a
dwelling, and if the lessee of a dwelling is not in default as
to the payment of his rent, the lessor may not recover
possession of a dwelling in any action or proceeding, cause
the lessee to quit involuntarily, increase the rent, or
decrease any services within 180 days from the date the tenant
has exercised certain rights, including, among other things:
a) In good faith, having given notice or made an oral
complaint to the lessor regarding tenantability.
b) In good faith, having filed a written complaint, or
registered an oral complaint, with an appropriate agency,
of which the lessor has notice, for the purpose of
obtaining correction of a condition relating to
tenantability. (Civil Code Section 1942.5(a).)
6)Prohibits a lessor from increasing rent, decreasing services,
causing a lessee to quit involuntarily, bringing an action to
recover possession, or threatening to do any of those acts,
for the purpose of retaliating against the lessee because he
or she has lawfully organized or participated in a lessees'
association or an organization advocating lessees' rights or
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has lawfully and peaceably exercised any rights under the law.
Further provides that in an action brought by or against the
lessee pursuant to this provision, the lessee shall bear the
burden of producing evidence that the lessor's conduct was, in
fact, retaliatory. (Civil Code Section 1942.5(c).)
COMMENTS : This bill is sponsored by the East Bay Community Law
Center (EBCLC), a non-profit law office that provides legal
services to low-income people, including defending tenants in
eviction cases. EBCLC states:
In representing tenants in unlawful detainer actions,
we find landlord attorneys regularly file motions to
exclude all evidence of retaliation on the theory that
retaliation can never be a defense in an unlawful
detainer based on alleged non-payment of rent.
Although this argument is based on a misreading of
Civil Code 1942.5, it all too frequently succeeds.
When these motions are granted, tenants are deprived of
one of their most important defenses.
In addition, landlord attorneys regularly file motions
to have the question of whether there is a breach of
the warranty of habitability decided by the judge, even
when the case is being tried by a jury. While these
motions contravene Section 1171 of the Code of Civil
Procedure (which provides: "[w]henever an issue of fact
is presented by the pleadings, it must be tried by a
jury?"), considerable court time is wasted in arguing
these motions and, when the motions are successful,
tenants are deprived of their right to have their cases
decided by juries. AB 969 eliminates ambiguities in
these statutes and brings them into closer alignment
with the intent and policy considerations underlying
their original codification.
Are questions of habitability questions of fact or questions of
law? As a preliminary matter that is central to this analysis,
it is important to ascertain whether the question of the
habitability of the premises (or more precisely, whether there
was a breach of the warranty of habitability) is a question of
fact or a question of law. On the surface, it may seem obvious
that habitability determinations--whether an apartment is
infested with vermin or mold, whether a ceiling leaks or the
plumbing is broken--pose questions of fact. There is a great
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deal of evidence, including legal authority and judicial
practice, to support the conclusion that habitability questions
are questions of fact, not law. First, case law establishes
that whether a breach of the warranty of habitability has
occurred is a question of fact. (Lehr v. Crosby, (1981) 123
Cal. App. 3rd Supp. 1, 6; Hall v. Municipal Court, (1974) 10
Cal. 3rd 641, 644.) When it has been determined that a breach
has occurred, trial courts must "use all available facts to
approximate the fair and reasonable damages under all of the
circumstances." (Green v. Superior Court (1974) 10 Cal. 3d 616,
638.)
Secondly, the Judicial Council, recognizing that habitability is
a question of fact, has provided a detailed jury instruction,
CACI 4320, setting forth standards by which the jury shall make
a determination regarding habitability. Jury verdict forms
established by the Judicial Council also provide for the jury's
determination of the question of habitability. Furthermore, the
California Supreme Court has held that failure to provide the
jury with instructions regarding the warranty of habitability
and the relevant standards for determining whether a breach had
occurred constitutes prejudicial error. (Knight v. Hallsthammer
(1981) 29 Cal. 3rd 46, 58.)
Several apartment associations and landlord groups oppose the
bill, but they generally do not contest that questions of
habitability are questions of fact, not law. Both supporters
and opponents agree that in various trial courts across the
state, questions of habitability are often sent to the jury in
those rare unlawful detainer cases where there is a jury,
notwithstanding the current wording of Section 1174.2.
Proponents contend that this confirms the soundness of the
public policy that they would now like to codify, while some
opponents contend that this represents the erroneous application
of the law.
Assuming that questions of habitability are indeed questions of
fact, this bill seeks to ensure that that such questions go to
the trier of fact, whether judge or jury. Existing law, CCP
Section 1174.2, provides that in an unlawful detainer case in
which the tenant has raised as an affirmative defense a breach
of the landlord's obligations under Section 1941 of the Civil
Code or of any warranty of habitability, it is "the court" that
shall determine whether a substantial breach of these
obligations has occurred. Supporters of this bill contend that
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in its current form, this reference to "the court" creates
ambiguity as to whether the judge or the jury, if there is one
in the case, should determine whether a breach of the warranty
of habitability has occurred when the tenant is raising breach
as an affirmative defense. According to one practicing EBCLC
attorney, the wording of the statute leads to lengthy arguments
before virtually every trial in which habitability is at issue.
To reduce ambiguity, this bill seeks to clarify that
determinations of factual questions of habitability should go to
the trier of fact in the trial, whether judge or jury. It would
revise Section 1174.2 to instead read that "the jury, or the
court, if the proceeding is tried without a jury," shall
determine whether a substantial breach of the warranty of
habitability has occurred. Supporters and opponents of the bill
both concede that under existing law, tenants have a statutory
right to a jury trial in an unlawful detainer case if they so
elect. (There is some disagreement as to whether the right is
constitutional, but that is not an issue here.) Nevertheless,
it is important to note that this bill does not require a jury
in any eviction case or mandate the expansion of jury trials in
such cases; it clarifies that the jury, if there is one, shall
consider factual questions of habitability in the case, if any
such questions arise.
Legislative history of Section 1174.2. Current Civil Code
Section 1174.2 was enacted by AB 3920 (Roos), Ch. 805, Stats.
1986, and included language stating "the court" shall determine
whether breach of habitability obligations has occurred. The
key issue presented by AB 3920 was specific criteria for
determining who the prevailing party was in an unlawful detainer
where breach of warranty of habitability is proven. A review of
the legislative history of this statute did not yield any
evidence that the Legislature specifically intended
determination of breach to be withheld from the jury, or for
that matter reserved to the court. In short, the legislative
history of AB 3920 is inconclusive on the reason why "the court"
is so designated.
Competing concerns for jury determination. Supporters cite a
number of arguments for jury-determination of habitability
questions. First and perhaps most persuasively, Section 1171 of
the Code of Civil Procedure plainly states "Whenever an issue of
fact is presented by the pleadings, it must be tried by a jury,
unless such jury be waived as in other cases." Section 1174.2
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appears to be in direct conflict with Section 1171. Secondly,
they note that juries are perfectly capable of handling this
task because, as reported, they already do in some cases, as
evidenced by the Judicial-Council-developed jury instruction
forms that currently provide juries with guidance on these
questions. Finally, proponents contend that the bill promotes
fairness by helping to ensure that tenants who have not waived a
jury trial are assured of having the jury consider and determine
factual questions of habitability that may be central to their
defense in the unlawful detainer case.
Opponents contend that this bill will encourage jury trials, and
that jury-determination of habitability questions will lengthen
what should be a summary proceeding, and will impose undue cost
on both the courts and landlords. For example, the California
Apartment Association (CAA) states "While a jury trial may be a
landlord's and tenant's right in certain circumstances,
encouraging more jury trials in eviction cases throughout the
state will add months of delay to what is supposed to be an
expedited process. Bottom line, AB 969 will result in
significant lost rent due to court delays and will add
substantial costs to the courts."
Finally, proponents counter these arguments raised by the
opposition by noting that courts have consistently found that
such concerns are substantially outweighed by the interest of
justice. In Green v. Superior Court (1974) 10 Cal. 3d 616, 636,
the California Supreme Court explained:
[W]hile the state does have a significant interest in
preserving a speedy repossession remedy, that interest
cannot justify the exclusion of matters which are
essential to a just resolution of the question of
possession at issue.... Certainly the interest in
preserving the summary nature of an action cannot
outweigh the interest of doing substantial justice. To
hold the preservation of the summary proceeding of
paramount importance would be analogous to the 'tail
wagging the dog."
The defense of retaliatory eviction ("retaliation"): a quick
background. Civil Code Section 1942.5 codifies the common law
defense of retaliatory eviction established by the California
Supreme Court in Schweiger v. Superior Court (1970) 3 Cal. 3d
507.
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Subsection (a) provides that a landlord may not increase rent,
decrease services, or terminate a tenancy within 180 days of the
tenant making a complaint about habitability if the landlord is
retaliating against a tenant and if the tenant is not in default
of the rent. (Emphasis added.) Subsection (c), on the other
hand, more broadly prohibits landlords from increasing rent,
decreasing services, or evicting a tenant for the purpose of
retaliating against the tenant for participating in a tenants'
association or because the tenant "has lawfully and peaceably
exercised any rights under the law." Under both subsections,
the tenant has the burden of proving retaliation and the
landlord can overcome the defense by pleading and proving a
non-retaliatory good-faith reason for the adverse action.
(Civil Code §1942.5(e).)
This bill seeks to address problems created by a reportedly
common misreading of the statute, to the detriment of tenants.
Although subdivisions (a) and (c) are distinct provisions, the
sponsor contends that landlord attorneys regularly seize upon
the limitations imposed in subsection (a) to argue that
retaliation is not a defense in any unlawful detainer action
based on alleged non-payment of rent. According to EBCLC and
others, these landlord attorneys typically file motions to
prevent the tenant from introducing evidence of retaliation at
trial. Because non-payment of rent cases make up the majority
of unlawful detainer cases before the court, proponents contend
that much court time is wasted in hearing and considering these
motions, and when they are successful, tenants who may truly be
the victims of retaliation are deprived of one of their most
important (and in some cases, only) affirmative defenses.
It is important to note that the Judicial Council recognizes
that the two subdivisions are distinct by providing two separate
jury instructions on retaliation. CACI 4321, based on
subsection (a), requires a tenant to prove retaliation and that
he or she is not in default of rent. CACI 4322, based on
subsection (c), requires the tenant to prove only that the
landlord is retaliating against the tenant for lawfully and
peaceably exercising a right, without any reference to rent.
To clarify that limitations that apply to subdivision (a) are
not misread to negate the ability to present evidence of
retaliation pursuant to subdivision (c), this bill would simply
insert the phrase "Notwithstanding subdivision (a)" into the
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beginning of subsection (c), thus eliminating any ambiguity
without changing the law. Importantly, this bill does not seek
to relieve the tenant from his current burden of proving the
elements of retaliation in order to successfully employ the
defense.
This bill also seeks to clarify the meaning of the term "in
default" in subdivision (a), affecting when the limited
presumption of retaliation applies. Finally, this bill seeks to
clarify the meaning of the term "in default" as it is used in
subdivision (a) of Civil Code Section 1942.5. According to
proponents, some courts have been broadly interpreting Section
1942.5 to preclude tenants from raising the retaliatory eviction
defense when the landlord has alleged non-payment of rent. This
potentially prejudices some tenants who may appropriately wish
to raise the defense, they contend, because not all instances of
non-payment of rent should be considered to be "in default."
For example, a tenant may be lawfully entitled to withhold a
certain amount of rent because a landlord has failed to make
necessary repairs pursuant to Civil Code Section 1942, and a
landlord may be barred from demanding or collecting rent if
certain substandard conditions exist rendering the property
uninhabitable pursuant to Civil Code Section 1942.4. Both of
these examples are proposed in the bill as examples where lawful
non-payment of rent should be distinguished from more apt cases
of "default" where the tenant simply breaches his obligation to
pay rent in violation of the lease.
Importantly, this bill does not seek to relieve the tenant from
his current burden of proving the elements of retaliation in
order to successfully employ the defense. It simply preserves
the ability of tenants to demonstrate to the court or jury what
circumstances, if any, justify the non-payment of rent that has
been alleged by the landlord.
Opponents of the bill contend that no clarification of "in
default" is necessary because existing law already provides a
defense to tenants who are justifiably withholding rent in true
cases of breach of habitability. The Apartment Association of
Greater Los Angeles writes:
As long as tenants are able to demonstrate to the court
that habitability claims are meritorious, the
withholding of rent is protected by the law and honored
by the court. Adding retaliation as a defense to
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non-payment of rent, as AB 969 would do, is
unnecessary, and unfair. If AB 969 were to pass,
withholding rent for any reason would lead to a trial
about whether the owner is retaliating by seeking to
collect rent and could result in the owner being
forever unable to collect it. Indeed, it creates a
presumption that any action undertaken by a property
owner to recover past-due rent is retaliatory.
In addition, the California Apartment Association states:
If the tenant justifiably withholds the rent to make
repairs because the unit was untenantable as defined in
law, then the tenant can use that as a defense in court
where the landlord is pursuing an eviction for the
tenant's failure to pay the rent. By including
language that provides a tenant is not in default on
rent if he or she claims to have exercised the right to
deduct an amount from or withhold the payment of rent,
this bill assumes the tenant is justified in that
withholding. CAA agrees the tenant may have the right
to withhold the rent. However, if the landlord
disagrees with that rent withholding, the court is left
to decide the dispute. Unlawful "retaliation" by the
landlord should not be an automatic assumption within
the statute just because the tenant claims to have
[exercised his right to deduct and repair.]
In response, proponents counter that the automatic assumption of
retaliation that landlords claim is unfair when a tenant claims
justifiable withholding of rent under this bill is essentially
no different than the automatic assumption of default that
tenants claim is unfair when a landlord alleges nonpayment of
rent under existing subdivision (a) of Section 1942.5.
Proponents contend that a simple allegation of default of rent
at an early stage in the proceeding is often enough to cut off
the protections of Section 1942.5(a) because the statute, as
currently worded, treats the allegation as something that is
presumed to be true. These tenant advocates even contend that
it is not unheard of for some landlords to refuse to accept
rent, even when it is proffered, so as to artificially create
circumstances of "default" that can then be used against the
tenant under Section 1942.5(a). In short, proponents assert
that current law allows presumption of default based on a
landlord's allegation, and does not treat "default" as a
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question of fact that would require both sides to justify their
respective positions.
ARGUMENTS IN OPPOSITION : The East Bay Rental Housing
Association, NORCAL Rental Property Association, and Apartment
Association of California Southern Cities submitted a joint
letter reflecting additional bases of opposition to the bill
questioning the propriety of juries to make habitability
determinations. These associations state two different sets of
concerns:
Habitability determinations are delegated to the court
for several important reasons:
(1) Because UDs are summary proceedings, delegating
the task of determining the habitability defense to
judges assures the legal process will not be delayed or
abused. (2) Judges have the experience and knowledge to
understand the complex legal issues involved in
assessing housing and building code standards, and
whether a substantial breach materially affects health
and safety.
(3) Unlike jury members who often misunderstand the
difference between habitability and maintenance, judges
can effectively differentiate between a habitability
issue such as a lack of heating, versus a maintenance
issue like a drippy faucet.
(4) Judges are in the best position to determine
whether a claim is frivolous or whether rent reduction
is warranted.
Allowing juries to determine the habitability issues
opens the door for egregious abuses of the summary
proceeding of unlawful detainers:
(1) In courts that have erroneously allowed juries to
determine habitability defenses, defendants and tenant
defense legal aid groups are incentivized to bring
meritless habitability claims because they have been
able to delay evictions by 4 to 6 weeks, and force free
rent-based settlements, including free rent for the
entire duration rent has been unpaid.
(2) Tenant-defendants merely need to claim a drippy
faucet as the reason for failing to pay rent to force a
settlement.
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(3) Landlords are forced to settle because even though
a drippy faucet is a frivolous habitability claim,
losing rental income from the delay of going to trial,
and paying attorney fees averaging $10,000-$15,000,
makes going to trial extremely expensive. This is how
the system is being abused.
(4) Because meritless habitability claims may be
allowed before juries, tenant defense groups use the
threat to demand settlements ranging from 3-6 months
free rent. Again, landlords are forced to settle
because of the expense and delay of trial, even though
most claims are completely meritless and frivolous.
As previously noted, research of the legislative history of
Section 1174.2 did not reveal any evidence that the Legislature
delegated habitability determinations to the court for any of
the reasons cited above by these opponents. In addition, the
opponents' second set of concerns appears to be with alleged
litigation practices by tenants and their attorneys that are
outside the scope of the language of the bill itself.
REGISTERED SUPPORT / OPPOSITION :
Support
East Bay Community Law Center (EBCLC) (sponsor)
Eviction Defense Center
Los Angeles Center for Law & Justice
National Housing Law Project
Tenants Together
Opposition
Apartment Association, California Southern Cities
Apartment Association of Greater Los Angeles
California Apartment Association
East Bay Rental Housing Association
NORCAL Rental Property Association
San Diego County Apartment Association
Santa Barbara Rental Property Association
Analysis Prepared by : Anthony Lew / JUD. / (916) 319-2334
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