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Vasquez v. CHI Properties, LLC

Supreme Court of Nebraska

April 5, 2019

Claudia Vasquez and Cesar Moreno Tinoco, appellants,
v.
CHI Properties, LLC, appellee.

         1. Motions to Dismiss: Appeal and Error. An appellate court reviews a district court's order granting a motion to dismiss de novo, accepting the allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party.

         2. Actions: Pleadings: Notice. Civil actions are controlled by a liberal pleading regime; a party is only required to set forth a short and plain statement of the claim showing that the pleader is entitled to relief and is not required to plead legal theories or cite appropriate statutes so long as the pleading gives fair notice of the claims asserted.

         3. Motions to Dismiss: Pleadings. To prevail against a motion to dismiss for failure to state a claim, a plaintiff must allege sufficient facts, accepted as true, to state a claim to relief that is plausible on its face.

         4. Rules of the Supreme Court: Pleadings. Dismissal under Neb. Ct. R. Pldg. § 6-1112(b)(6) should be granted only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief.

         5. Statutes: Legislature: Intent. In construing statutes, legislative intention is to be determined from a general consideration of a whole act with reference to the subject matter to which it applies and the particular topic under which the language in question is found, and intent so deduced from the whole will prevail over that of a particular part considered separately.

         6. Actions: Landlord and Tenant: Leases: Words and Phrases. A tenant who accepts possession and lives on the property for several months thereafter does not have a claim under Neb. Rev. Stat. § 76-1418 (Reissue 2018), because the duties described in § 76-1418 pertain to the "commencement" of the lease term.

         [302 Neb. 743] 7. Election of Remedies: Estoppel: Claim Preclusion. The doctrine of election of remedies is a somewhat vague notion lying somewhere between the areas occupied by the doctrines of equitable estoppel and claim preclusion.

         8. Election of Remedies: Proof. When the election is between remedies with different elements of proof under the same complaint, a plaintiff can attempt to prove both theories and need only elect one for the purpose of recovery in the event that the trier of fact finds both theories were proved.

         9. Election of Remedies: Pleadings. So long as the plaintiff does not ultimately obtain two recoveries for the same harm, the doctrine of election of remedies does not generally prevent the plaintiff from pleading remedies that are mutually exclusive.

         10. Election of Remedies. Election of remedies applies only when there are inconsistent remedies for redress of the same single injury.

         11. Landlord and Tenant: Contracts: Notice: Injunction: Damages: Time. So long as a tenant has given notice when required by Neb. Rev. Stat. § 76-1419 (Reissue 2018), a tenant can seek damages or injunctive relief under Neb. Rev. Stat. § 76-1425(2) (Reissue 2018) without sending notice under § 76-1425(1) specifying that the rental agreement will terminate upon a date not less than 30 days after receipt of the notice of the breach, if not remedied within 14 days.

         12. Landlord and Tenant: Election of Remedies: Injunction: Damages: Words and Phrases. The reference in the conjunctive to "damages" and "injunctive relief in Neb. Rev. Stat. § 76-1425(2) (Reissue 2018) serves to vest a tenant with two distinct options for relief and does not require that both be pursued in order to pursue either.

         13. Actions: Landlord and Tenant: Contracts. Neither Neb. Rev. Stat. §§ 76-1430 and 76-1439 (Reissue 2018) nor any other provision of the Uniform Residential Landlord and Tenant Act, Neb. Rev. Stat. §§ 76-1402 to 76-1449 (Reissue 2018), indicates that a separate action for termination of a rental agreement is a prerequisite to termination under the act.

          Appeal from the District Court for Douglas County: J. Michael Coffey, Judge.

          Katelyn Cherney, of Milton R. Abrahams Legal Clinic, for appellants.

          Mark S. Dickhute for appellee.

         [302 Neb. 744] Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

          FREUDENBERG, J.

         NATURE OF CASE

         Tenants brought a complaint against their landlord under the Uniform Residential Landlord and Tenant Act (URLTA), Neb. Rev. Stat. §§ 76-1402 to 76-1449 (Reissue 2018). They alleged that numerous code violations materially affecting their health and safety were present at the time they commenced physical possession of the property, but were not discovered until later. The tenants asked the City of Omaha Planning Department's housing division (Housing Division) to conduct an inspection of the property, which eventually led to the Housing Division's declaring the property unsafe and unfit for human occupancy and ordering the tenants to immediately vacate the premises. The landlord failed to perform repairs to make the property habitable even after months of repeated notices and demands by the Housing Division and the tenants. During much of this time, the tenants continued to pay utilities. The tenants eventually gave their landlord 5 days' notice of their intention to terminate the rental agreement. The landlord refused to return the tenants' security deposit or reimburse them for utilities paid. The landlord also refused to return rent paid for the 2 months that the tenants were mostly unable to occupy the premises, which the landlord allegedly had demanded in retaliation for the tenants' reporting to the Housing Division. The district court dismissed the complaint under Neb. Ct. R. Pldg. § 6-1112(b)(6), and the tenants appeal. The question presented is whether the alleged facts state a claim for relief under the URLTA.

         BACKGROUND

         Complaint Claudia Vasquez and Cesar Moreno Tinoco (tenants) filed a complaint against CHI Properties, LLC (CHI). After their first [302 Neb. 745] complaint was dismissed, they were granted leave to amend. The amended complaint alleged the following.

         On or about May 10, 2016, tenants entered into a written agreement to rent property owned by CHI for $850 per month and to pay $850 as a security deposit. During the first 8 weeks of the lease term, after tenants began living at the property, they noticed a water leak in the bathroom that was causing mold formation. CHI sent a plumber to repair the leak, but the repair was not effective.

         CHI failed to adequately respond to tenants' concerns regarding surface mold in the home. In July 2016, tenants' minor child was treated for mold exposure and the Douglas County Health Department was contacted.

         By letter dated October 4, 2016, the health department issued written recommendations to CHI for resolving an active water leak and visible mold. As of November 18, CHI made no efforts to follow the recommendations or otherwise resolve the water leak and mold.

         Tenants contacted the Housing Division, requesting a housing inspection for possible housing code violations. The Housing Division inspected the property on October 7, 2016, and issued a '"Notice of Property Violation'" to CHI by mail on October 14.

         When CHI received the violation notice on or around October 17, 2016, CHI demanded, in retaliation for tenants' complaint to the Housing Division, that tenants vacate the property within 2 weeks.

         Around that same time, CHI accepted a payment by tenants in the amount of $850 for November's rent. Tenants had made all prior rent payments since the inception of the rental agreement.

         On or around November 14, 2016, the Housing Division found that CHI had not cured the previously cited violations, and additional violations were discovered. There were 31 code violations in total, 13 of which were considered to be of a "'high' severity level."

         [302 Neb. 746] On or around November 17, 2016, a major electrical hazard at the property was detected by the Housing Division and the Omaha Public Power District. This major electrical hazard put tenants at risk of serious harm. This hazard existed at the commencement of the rental agreement, although tenants were unaware of it at that time.

         The Housing Division declared the property unsafe and unfit for human occupancy and ordered tenants to immediately vacate the property. A placard '"Danger-Closed, "' along with a description of the penalties for occupancy, was posted on the property by the Housing Division on November 18, 2016.

         That same day, CHI spoke with tenants and assured them that repairs would be completed within a few days. Tenants stayed with family members. There is no allegation that they paid rent to their family members.

         On or around December 16, 2016, tenants sent written notice to CHI demanding performance of the rental agreement. The details of this notice are not otherwise described in the complaint. Tenants remained barred from the property by the Housing Division.

         On or around December 19, 2016, the Housing Division again inspected the property. It found that CHI was working on the electrical issue, but it was not completed, and that CHI had not remedied any of the other 30 code violations.

         During an inspection on December 28, 2016, the Housing Division found that the '"water is off and the water heater is being re-installed.'" The Housing Division notified CHI and tenants that no one could occupy the premises until the water heater was properly installed.

         At some point, despite the Housing Division's no-occupancy order, CHI threatened that if tenants did not resume occupancy, it would treat them as if they had abandoned the property and dispose of their personal belongings.

         On January 9, 2017, tenants mailed a second written notice to CHI, demanding that it complete all repairs and inspections necessary so that they could resume occupancy.

         [302 Neb. 747] The Housing Division removed the placard from the property on February 3, 2017, and tenants moved back in on February 5. However, tenants immediately discovered that the water was off and major plumbing repairs were in progress. Tenants had not paid rent for December 2016 or January 2017, but they had paid for television and internet services until approximately January 10 and had paid all utility bills until March 14.

         On February 6, 2017, CHI demanded and tenants paid $850 for the February rent. Through a notice posted on February 2, CHI had threatened to bring a restitution action if tenants failed to pay February's rent.

         The following day, on February 7, 2017, the Housing Division issued a new order to vacate and the property was replacarded. The Housing Division ordered CHI to hire a licensed plumber to correct noncompliant plumbing work and complete necessary plumbing inspections within 30 days. CHI failed to comply. CHI did not refund tenants their February rent payment.

         Tenants "terminated their lease effective March 12, 2017, and demanded return of all prepaid rent and security after tendering five days' written notice under Neb. Rev. Stat. § 76-1426(1) for [CHI's] failure to deliver possession of fit and habitable premises." Tenants had been excluded from the property for nearly 4 months due to CHI's refusal to complete repairs and inspections necessary to have the property released for occupancy by the Housing Division.

         CHI failed to return tenants' "prepaid rent" and security deposit following written demand. The property remained under an active vacate order as of May 1, 2017, the date tenants filed their amended complaint.

         Tenants' amended complaint alleged causes of action under the URLTA. They cited to §§ 76-1426, 76-1419, 76-1430, and 76-1439, which corresponded to actions for (1) failure to deliver possession, (2) failure to maintain fit premises, (3) unlawful ouster, and (4) retaliation. Tenants sought return of their security deposit, which is provided for by § 76-1416(2), [302 Neb. 748] as well as other provisions of the URLTA, damages, and attorney fees.

         Motion to Dismiss

         CHI moved to dismiss the complaint under § 6-1112(b)(6) for failure to state a claim.

         CHI asserted, first, that there was no allegation that possession had not been delivered. Thus, according to CHI, there was no breach of the duty set forth in § 76-1418 and the remedies of § 76-1426 do not apply, including the 5-day notice to terminate.

         Second, CHI asserted that because there was no allegation that tenants had delivered a "14/30 day Notice to Cure," tenants could not make any claim for damages under § 76-1425. Nor, according to CHI, did tenants assert any facts showing damages, "because they procured substitute services and deducted them from the rent, as provided in Neb. Rev. Stat. §76-1427 (1)" or "secured substitute housing and abated the payment of rent, the remedy allowed to them under Neb. Rev. Stat. §76-1427(2)." CHI asserted that tenants' allegations that they resorted to the remedy of abatement precluded them, pursuant to § 76-1427(2), from pursuing damages or attorney fees.

         CHI asserted that tenants failed to state claims under § 76-1430 or § 76-1439 for retaliation or ouster, because there was no allegation that tenants had either recovered possession or lawfully terminated the rental agreement.

         At the hearing on the motion to dismiss, CHI submitted, without objection, a printout from Nebraska's online trial court case management system, known as JUSTICE, for the court to take judicial notice of, which demonstrated that tenants did not file a separate action to terminate the lease.

         Order of Dismissal

         The district court concluded that tenants failed to state a claim for breach of the duty to deliver, because §§ 76-1418 and 76-1426 did not apply when tenants accepted [302 Neb. 749] physical possession of the property at the commencement of the rental period.

         Regarding the alleged failure to maintain fit and habitable premises, the court stated that tenants' failure to allege that they had delivered to CHI a "14/30 day Notice to Cure or terminate the lease" prevented their claim. The court also cited to the exhibit demonstrating that tenants did not bring a separate action to terminate the lease. The court reasoned, further, that damages under § 76-1425 were not available for any breach of a duty to maintain fit premises, because damages are available under the statute only "when an action for injunctive relief has also been brought." Finally, the court reasoned that because tenants resorted to the remedy of abatement pursuant to § 76-1427(2), they were precluded from recovering damages and attorney fees under § 76-1425(2).

         The court concluded that tenants failed to state claims for ouster or retaliation under §§ 76-1430 and 76-1439(2), because there was no allegation that tenants either recovered possession or lawfully terminated the rental agreement.

         The court granted CHI's motion to dismiss. Tenants elected to stand on the amended complaint and sought entry of a final judgment. The court dismissed the complaint "with / ...


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