Real Estate NewsLandlord May Be Liable for Tenant Who Does Work on the Premises
Landlords who pay attention to such things know that they may incur a wide range of liabilities for the behavior of their tenants, their tenants" guests, their tenants" dogs, etc. Moreover, as lawsuits go on and on and court opinions are rendered, the trend continually seems to be that this range of liability is expanded, never contracted.
Thanks to Harold Justman, successor editor of the California Real Estate Newsletter, for bringing to our attention a continuation of the trend. The recent case of Barba v. Perez (California 3rd Appellate District Court of Appeal) introduces to us the notion that, in certain circumstances, a landlord may be held liable for his tenant"s actions because the tenant is deemed to be the landlord"s agent. A principal-agent relationship between landlord and tenant! How could that be? Read on.
On May 18, 2004, Perez was the owner of the Tropical Club in Lodi, which included a rental housing unit above the club. Perez"s business affairs were managed by his wife, Leticia. She "collected rent for the housing unit, hired staff and musicians for the club, paid the employees, and coordinated with vendors for the club"s supplies." According to the court record, "On May 18, 2004, Barba and his wife visited Leticia at the apartment above the tropical club. Juan Mendoza, a musician at the club and occasional aide to Perez, was also there, preparing to move into the apartment with his wife. Earlier that day, Leticia had asked Mendoza to move an old refrigerator out of the apartment to make room for the new one. When Barba and his wife arrived at the apartment to visit, she [Leticia] asked Barba to help Mendoza move the refrigerator.
Nothing unusual so far, right? Friends helping friends, friends helping the tenants of friends, it"s what people do. But this time there was a complication. As Mendoza (the tenant) and Barba (the friend) were trying to negotiate the old refrigerator down the stairs, Mendoza, who was at the upper end, lost grip of the dolly handles. Barba, unable to hold up the refrigerator by himself, wound up with a broken ankle. He had to be taken to a hospital where surgery was performed.
There are limits to friendship, of course, and more than $70,000 of medical expenses exceeded the limits between Barba and Mr. and Mrs. Perez. He sued. At trial, the jury found that the tenant, Mendoza, was acting as the agent of Mr. and Mrs. Perez. The principals, being responsible for the acts of their agent, were held obligated for a total of $117,053 – the combination of Barba"s medical expenses and lost income.
On appeal Perez argued that Mendoza was not their agent and that they, therefore, should not be held responsible for his acts. The appellate court disagreed. The appellate opinion pointed out that no written agreement is necessary for an agency relationship to exist. "Proof of an agency relationship may be established by "evidence of the acts of the parties … ."" "The existence of an agency relationship is a factual question for the trier of fact … ."
The court went on to note that "the major characteristic of an agency relationship … is the right to control the agent." "The power of the principal to terminate the services of the agent gives him the means of controlling the agent"s activities. "The right to immediately discharge involves the right of control."" Of course, Mrs. Perez could, at any time, have discharged Mendoza from the task of moving the refrigerator. Hence, the court reasoned, from the facts that Mendoza was a tenant, a sometime musician at the club, and an occasional employee of the Perezes, "a reasonable jury could find that Mendoza was subject to Leticia"s control and supervision and was therefore acting as her agent at the time of the accident."
So what is the take-away from this for landlords? Be careful about what you ask tenants to do on your behalf. "I"m getting you a new refrigerator, but I want you to move the old one out" might save a landlord the $50 or so fee that the appliance delivery firm might have charged. But, in this case, saving that fee wound up costing the landlords over $100,000. Better to pay the going rate.