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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Sullivan v. Subramanian (5/12/00) sp-5270

Sullivan v. Subramanian (5/12/00) sp-5270

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of the
Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907)
264-0608, fax (907) 264-0878.


McCABE,                       )    Supreme Court No. S-8724
               Appellants,    )    Superior Court No.
                              )    3AN-97-8715 CI 
          v.                  )    
LATHA SUBRAMANIAN,            )    O P I N I O N
               Appellee.      )    [No. 5270 - May 12, 2000]

          Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
                    Peter A. Michalski, Judge.

          Appearances: Patrick J. McCabe, Anchorage, for
Appellants.  Dorothea G. Aguero, Anchorage, for Appellee.

          Before:  Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.

          PER CURIAM.

          This landlord-tenant dispute requires us to consider the
circumstances under which Alaska's Uniform Landlord and Tenant Act
allows tenants to recover damages for their landlord's
noncompliance with duties imposed under the act.  We hold that the
act permits a tenant to recover damages, including diminished
rental value, for a landlord's breaches of statutory duties,
regardless of whether those breaches are "material" or involve
"essential services."  Because the trial court's findings on the
issues of breach and damages do not adequately explain the basis of
its decision and preclude us from determining whether it correctly
applied the law, we remand for reconsideration and new findings. 
          In April 1995 Dr. Latha Subramanian bought a four-unit
apartment building in Anchorage.  Patrick McCabe and Sue Sullivan
occupied two of the building's apartments and continued on as
tenants after Subramanian acquired the fourplex. 
          In October 1997 McCabe and Sullivan sued Subramanian,
alleging that she had repeatedly violated her contractual and
statutory obligations under their rental agreements and Alaska's
Uniform Residential Landlord and Tenant Act by neglecting the
building's common areas, failing to maintain electrical facilities,
and providing inadequate security.  McCabe and Sullivan sought
damages in the form of diminished rental value and initially
requested an order compelling Subramanian to attend to the common
areas of the building.
          Subramanian denied the allegations of the complaint and,
in early December 1997, served notices of eviction on both McCabe
and Sullivan for late payment of rent.  Upon receiving his notice,
McCabe stopped payment on his check for the December rent. 
          McCabe and Sullivan vacated their apartments on
December 22.  Thereafter, they amended their complaint, dropping
their claim for injunctive relief, renewing their claims for
damages based on breach of contractual and statutory duties, and
stating new claims for retaliatory eviction and failure to return
security deposits.  Subramanian again denied the allegations; she
also counterclaimed against McCabe for deliberately breaking the
apartment building's front door and failing to pay the December
          After conducting a non-jury trial, Superior Court Judge
Peter A. Michalski entered written findings of fact and a final
decision and order ruling in favor of Subramanian.
          The trial court found that after Subramanian purchased
the fourplex "the care for some of the common areas suffered from
neglect."  It noted that Subramanian arranged to have the lawn
mowed only once each summer, and that it became overgrown;
according to the court, "[a]nother common area which suffered was
the hallways[, which] . . . received little maintenance, resulting
in dirty, littered halls in which some of the lights were
frequently burned out." 
          The court found that, as a result of these and other
concerns, the tenants became "disappointed in the attention the
landlord was affording the property" and began "resorting to
appropriate self help," taking measures such as replacing light
bulbs, cleaning halls, and plowing the drive and then deducting the
costs of these measures from their rent.
          Nevertheless, the court ruled that none of these
"failures of the landlord" rose "to a level justifying diminution
of fair rental values pursuant to AS 34.03.180."  It went on to
find that Sullivan and McCabe had failed to prove their claims of
retaliatory eviction, that McCabe had unjustifiably broken the
front door of the fourplex, causing $500 in damages, and that
Subramanian had properly withheld McCabe's security deposit to
offset the cost of this damage and to cover the amount McCabe owed
for rent after stopping payment on his last month's check. 
          Based on these findings, the court concluded that
Subramanian was entitled to recover damages of $835.16 from McCabe.
[Fn. 1]  The court further concluded that Sullivan -- who had paid
her last month's rent and had received a refund for her security
deposit -- recovered nothing from Subramanian.
          After the court entered its decision, Subramanian moved
for an award of full attorney's fees, alleging bad faith and
vexatious conduct by McCabe, who is an attorney and had represented
both himself and Sullivan throughout the proceedings.  The court
granted this motion as to McCabe, ordering him to pay $14,825 in
attorney's fees and entering judgment against him in the total
amount of $16,572.86.  The court separately entered judgment
against Sullivan for costs totaling $872.12.
          McCabe and Sullivan appeal.
     A.   McCabe's and Sullivan's Claims
          On appeal, McCabe and Sullivan argue: (1) that the
superior court's findings are inadequate because they fail to
resolve numerous factual points and do not squarely address the
claims of contractual and statutory breach; (2) that the court's
factual findings, coupled with the facts established by undisputed
evidence at trial, prove contractual and statutory breaches that
entitle McCabe and Sullivan to judgment as a matter of law;
(3) that the trial court erred in failing to award Sullivan a
prorated portion of her December 1997 rent for the period after she
vacated her apartment, as well as statutory damages for
Subramanian's failure to refund the excess December rent payment;
(4) that the evidence fails to support the $500 award against
McCabe for damaging the fourplex door; and (5) that the court erred
in awarding full reasonable attorney's fees against McCabe.
     B.   The Trial Court's Findings Do Not Permit Meaningful
Appellate Review.

          We conclude that McCabe's and Sullivan's first point has
merit: the trial court's findings are insufficient to allow
meaningful appellate review.  
          a.   Requirements of Alaska Civil Rule 52(a)
          Under Alaska Civil Rule 52(a), the trial court had a
duty, upon completing the non-jury trial, to "find the facts
specially and state separately its conclusions of law thereon." 
This rule required the court to "deal adequately with and state
with clarity what it finds as facts and what it holds as
conclusions of law.  The findings and conclusions should be so
clear and explicit as to give the Supreme Court a clear
understanding of the basis for the decision made." [Fn. 2]
          b.   The trial court's findings overlook a significant
aspect of McCabe's and Sullivan's factual claim.

          McCabe and Sullivan presented substantial evidence
indicating that Subramanian neglected the common grounds 
surrounding their apartment building, did not maintain the common
areas within the building or replace burned out lighting, and
failed to heed repeated requests to protect the common areas of the
building, particularly the storage lockers, against damage and
theft by trespassers.  While the trial court's factual findings
address the first two claims of harm, confirming that Subramanian
neglected the lawn and the common areas within the fourplex, the
findings fail to discuss, or even mention, the latter factual claim
-- that Subramanian failed to secure the building against trespass
and theft.
          c.   The trial court's findings fail to expressly
address McCabe's and Sullivan's claims for breach and do not
adequately explain the basis for the court's denial of diminished
rental value.

          The trial court also failed to explain its resolution of 
McCabe's and Sullivan's claims for contractual and statutory
breaches.  These claims are governed by Alaska's Uniform
Residential Landlord and Tenant Act. [Fn. 3]  Adopted in 1974, [Fn.
4] the "Uniform Act constitutes a basic reform of landlord-tenant
law, according tenants previously unrecognized rights by
recognizing the contractual nature of the landlord-tenant
relationship." [Fn. 5]  By its own terms, the act is to be
"liberally construed and applied to promote its underlying purposes
and policies," one of which is "to encourage landlord and tenant to
maintain and improve the quality of housing." [Fn. 6]
          Subsection .100(a) of the act defines the landlord's
duties to include making all repairs necessary to keep the premises
in a fit and habitable condition, keeping all common areas clean
and safe, maintaining in good and safe working order all electrical
facilities and appliances, providing for the removal of waste, and,
upon request of a tenant, providing and maintaining locks and keys
that are reasonably adequate to ensure safety to the tenant's
person and property. [Fn. 7]  Barring circumstances that do not
exist here, landlords are prohibited from shifting these duties to
their tenants. [Fn. 8]
          Section .160 of the act addresses a tenant's remedies in
the event a landlord breaches a duty imposed under section .100. 
In the event of a noncompliance with section .100 "materially
affecting health and safety," subsection .160(a) allows tenants to
terminate their rental agreements after giving appropriate notice
to their landlords. [Fn. 9]  For other serious breaches -- as when
landlords deliberately or negligently fail to supply essential
services such as running water, hot water, heat, or sanitary
facilities -- a separate provision of the act, section .180, makes
additional remedies available "immediately" to tenants. [Fn. 10]  
          In addition to these provisions describing remedies
available for "material" breaches and breaches involving "essential
services," the act establishes a general remedy in subsection
.160(b) that applies whenever landlords breach any statutory or
contractual duties.  Without requiring that such breaches must be
"material" or involve "essential services," this provision broadly
authorizes tenants to "recover damages and obtain injunctive relief
for any noncompliance by the landlord with . . . AS 34.03.100."
[Fn. 11]  Nothing in this provision suggests that diminished rental
value is an impermissible form of damages, when actually proved.
          Under AS 34.03.160(b), then, McCabe and Sullivan would be
entitled to recover damages if they established any noncompliance
by Subramanian with AS 34.03.100(a) that appreciably reduced their
rental values.  Construed favorably to McCabe and Sullivan, the
evidence presented at trial would support a finding that
Subramanian failed to comply with several duties imposed on her as
a landlord by AS 34.03.100(a).  (Indeed, although Subramanian
argues otherwise, the trial court's findings suggest that the court
actually found noncompliance.)  Furthermore, McCabe's trial
testimony is at least minimally sufficient to support a finding
that Subramanian's noncompliance resulted in an appreciable drop in
the fair rental value of the apartments.  Yet the trial court's
findings fail to determine whether Subramanian breached any duty
under AS 34.03.100(a) and also fail to determine whether McCabe and
Sullivan established a resulting drop in fair rental value.
          The trial court's decision is particularly ambiguous in
finding that "any of the failures of the landlord" did not "rise to
a level justifying diminution of fair rental values pursuant to AS
34.03.180." (Emphasis added.)  Given the court's reference to
section .180, the provision governing breaches that involve failure
to provide essential services, we are unable to determine whether
the court meant to find that McCabe and Sullivan had simply failed
to prove any appreciable diminution in fair rental value or if it
meant instead to find that they were legally entitled to recover
damages only if they proved a breach involving essential services,
as specified in section .180, and that they had failed to prove
such a breach.  The former finding would be a factual determination
within the scope of the trial court's discretion; the latter would
be a finding based on a mistaken legal premise, since subsection
.160(b) does not require proof of noncompliance involving failure
to provided essential services.
          Subramanian concedes that AS 34.03.180 has no relevance
here but nevertheless insists the trial court's citation to this
provision is simply a clerical error.  But the reason for the
court's reference to section .180 is not as obvious as Subramanian
suggests.  In mentioning section .180, the trial court expressly
tracked the section's language, which specifically authorizes
recovery "based on the diminution of fair rental value." [Fn. 12] 
Thus, the court's reference to section .180 does not appear to have
been inadvertent.
          Moreover, Subramanian's final argument at trial also
suggests that the court's reference to section .180 may reflect a
mistaken understanding of the law, rather than an inadvertent
citation.  During final argument before the superior court,
Subramanian insisted that recovery of damages for breach would be
warranted only for a "material breach," and she emphasized that
"[t]here was no material breach of the statute" here. [Fn. 13]
          Also ambiguous are the trial court's findings referring
to McCabe's and Sullivan's self-help measures as "appropriate."  In
context, it is unclear whether the court meant to find that McCabe
and Sullivan actually suffered no damages other than the out-of-
pocket costs that they incurred and appropriately deducted from
their rent or that such a deduction is the only appropriate measure
of damages for a landlord's "non-material" breach of duties imposed
under AS 34.03.100(a).  The latter view would be problematic, since
it would effectively allow landlords to shift the burden of
statutory compliance, at least in part, from themselves to their
tenants. [Fn. 14]
          In sum, the trial court did not address significant
aspects of McCabe's and Sullivan's factual claims, did not
expressly decide whether Subramanian had failed to comply with her
duties under AS 34.03.100(a), did not determine whether any such
violations resulted in an actual reduction of fair rental value,
and did not explain the court's reasons for concluding that "any of
the failures" by Subramanian failed to "rise to a level justifying
diminution of fair rental values pursuant to AS 34.03.180."  Given
these omissions, the trial court's findings do not "give [us] a
clear understanding of the basis for the decision [it] made." [Fn.
          Because the findings create substantial uncertainty
concerning the trial court's view of disputed material facts and
generate doubt concerning its application of correct law, we
conclude that a remand is necessary to allow the court to
reconsider and fully explain its ruling on the issues of statutory
breach and diminished rental value. [Fn. 16] 
     C.   The Superior Court Erred in Failing to Rule on Sullivan's
Claim for a Partial Refund of Rent and Damages Under AS

          Sullivan separately contends that the trial court erred
in failing to order a partial refund of her December rent payment,
as well as damages for Subramanian's failure to refund the payment
promptly.  Arguing that Subramanian made no effort to mitigate her
damages by attempting to find a replacement tenant, Sullivan
insists that she owed no rent beyond December 22, when she moved
out of the apartment.  Because Subramanian had no right to a full
month's rent for December, Sullivan maintains that she is entitled
to a prorated refund of her rent and to an award of damages under
AS 34.03.070(d). [Fn. 17]
          We agree that the superior court must revisit this issue
on remand.  The trial court neglected to rule on Sullivan's claim
for a refund and damages; its findings and conclusions resolve
Sullivan's retaliatory eviction claim but make no mention of her
claim under AS 34.03.070(d).  Although the court expressly rejected
McCabe's claim for similar damages because McCabe did not pay his
December rent and Subramanian therefore never retained any part of
it, the same rationale would not apply to Sullivan, who did pay a
full month's rent before vacating the apartment on December 22.
          At trial, Subramanian contended that McCabe and Sullivan
should both be liable for a full month's rent in December.  But the
trial court rejected this approach as to McCabe, calculating the
damages that he owed Subramanian by prorating his rent through
December 22.  On appeal, Subramanian acknowledges that "the trial
court did not explain why it ruled McCabe's rent should be pro-
rated and not Sullivan's rent"; she concedes that the ruling
"should have been consistent for both McCabe and Sullivan." 
          Subramanian has not challenged the trial court's decision
to prorate McCabe's December rent.  Moreover, as Sullivan
persuasively argues, the record does not support a finding that
Subramanian made any reasonable effort to find a new tenant to
occupy the apartment after Sullivan vacated on December 22.  Our
review of the record convinces us that Sullivan was entitled to a
prorated refund of rent for December.  On remand, the superior
court must therefore amend Sullivan's judgment accordingly.  The
court must also rule on Sullivan's claim for additional damages
under subsection .070(d). [Fn. 18] 
     D.   The Evidence Supports the Trial Court's Award for the
Broken Door.

          McCabe challenges the sufficiency of the evidence to
support the trial court's award of $500 as the reasonable cost of
repair for the door that he damaged.  This argument lacks merit. 
At her deposition and later at trial, Subramanian estimated the
cost of repair for the door to be at least $500.  Although the
estimate was based on hearsay, McCabe did not object to it on that
ground.  Subramanian described the damage that McCabe had caused,
submitted pieces of the door jamb as a trial exhibit, and also
submitted a photograph of the damage.  Once the fact of damages has
been proved, their dollar amount "need only be proven to such a
degree as to allow the finder of fact to reasonably estimate the
amount to be allowed for [the] item [of damages]." [Fn. 19] 
Subramanian met this burden here.
     E.   If the Court Awards Attorney's Fees on Remand, It Should
Rely on AS 34.03.350 Instead of Civil Rule 82.

          McCabe last challenges the trial court's award of full
reasonable attorney's fees to Subramanian.  Our decision to remand
this case for reconsideration on the merits renders this point
premature and potentially moot.  Nevertheless, we address a
preliminary aspect of this issue briefly to provide guidance to the
trial court on remand.  
          The trial court awarded attorney's fees under Civil
Rule 82, concluding that full fees were justified because McCabe
asserted his claims vexatiously and engaged in bad faith conduct.
But AS 34.03.350 expressly governs the award of fees in this case,
providing that "[a]ttorney's fees shall be allowed to the
prevailing party in any proceeding arising out of this chapter or
a rental agreement."  McCabe's and Sullivan's claims arise "out of"
Chapter 3 of Title 34, so any award of attorney's fees on remand
should be made under section .350, rather than Rule 82.  
          Since we have never construed AS 34.03.350 and the
parties have offered no meaningful discussion of the statute in
their briefs, the superior court should have the first opportunity
to decide any questions on remand concerning the statute's meaning
and application.
          For the foregoing reasons, we REMAND this case to the
superior court with directions to reconsider its decision as
directed herein and to enter findings and conclusions conforming
with the requirements of Civil Rule 52(a).


Footnote 1:

     The court found that McCabe owed Subramanian $1,135.16 in
total:  $500 for the broken door, plus $635.16 in unpaid December
rent -- a figure calculated by prorating McCabe's monthly rent of
$875 through December 22, the date he actually vacated his
apartment.  From this total of $1,135.16, the court deducted $300
for McCabe's security deposit, which Subramanian had withheld. 
This yielded a net obligation of $835.16.

Footnote 2:

     Dickerson v. Geiermann, 368 P.2d 217, 219 (Alaska 1962)
(footnotes omitted).

Footnote 3:

     AS 34.03.010 - .380.

Footnote 4:

     See Ch. 10, sec. 1, SLA 1974.

Footnote 5:

     McCall v. Fickes, 556 P.2d 535, 537-38 (Alaska 1976)
(footnotes omitted). 

Footnote 6:

     AS 34.03.010.  This section provides: 

               (a)  This chapter shall be liberally
          construed and applied to promote its
underlying purposes and policies.

               (b)  The underlying purposes and policies
of this chapter are to

               (1)  simplify, clarify, modernize, and
revise the law governing the rental of dwelling units and the
rights and obligations of landlord and tenant;

               (2)  encourage landlord and tenant to
maintain and improve the quality of housing;  and

               (3)  make uniform the law among those
states that enact it.

Footnote 7:

     AS 34.03.100(a) provides, in relevant part:

               (a)  The landlord shall

               (1)  make all repairs and do whatever is
necessary to put and keep the premises in a fit and habitable

               (2)  keep all common areas of the
premises in a clean and safe condition;

               (3)  maintain in good and safe working
order and condition all electrical, plumbing, sanitary, heating,
ventilating, air-conditioning, kitchen, and other facilities and
appliances, including elevators, supplied or required to be
supplied by the landlord;

               (4)  provide and maintain appropriate
receptacles and conveniences for the removal of ashes, garbage,
rubbish, and other waste incidental to the occupancy of the
dwelling unit and arrange for their removal;

               . . . .
               (6)  if requested by the tenant, provide
          and maintain locks and furnish keys reasonably
          adequate to ensure safety to the tenant's
person and property[.]

Footnote 8:

     See AS 34.03.100(d); Coburn v. Burton, 790 P.2d 1355, 1357-58
(Alaska 1990).      

          AS 34.03.100(d) provides:

               (d)  The landlord and tenant of a
dwelling unit other than a single family residence may agree that
the tenant is to perform specified repairs, maintenance tasks,
alterations, or remodeling only if

               (1)  the agreement of the parties is
entered into in good faith and not for the purpose of evading the
obligations of the landlord and is set out in a separate writing
signed by the parties and supported by adequate consideration; and

               (2)  the agreement does not diminish or
affect the obligation of the landlord to other tenants in the

Footnote 9:

     AS 34.03.160(a) provides:

               Except as provided in this chapter, if
there is a material noncompliance by the landlord with the rental
agreement or a noncompliance with AS 34.03.100 materially affecting
health and safety, the tenant may deliver a written notice to the
landlord specifying the acts and omissions constituting the breach
and specifying that the rental agreement will terminate upon a date
not less than 20 days after receipt of the notice if the breach is
not remedied in 10 days, and the rental agreement shall terminate
as provided in the notice subject to the provisions of this
section.  If the breach is remediable by repairs or the payment of
damages or otherwise, and the landlord remedies the breach before
the date specified in the notice, the rental agreement will not
terminate.  In the absence of due care by the landlord, if
substantially the same act or omission that constituted a prior
noncompliance of which notice was given recurs within six months,
the tenant may terminate the rental agreement upon at least 10 days
written notice specifying the breach and the date of termination of
the rental agreement.  The tenant may not terminate for a condition
caused by the deliberate or negligent act or omission of the
tenant, a member of the tenant's family, or other person on the
premises with the tenant's consent.

Footnote 10:

     AS 34.03.180 provides: 

               (a)  If, contrary to the rental agreement
or AS 34.03.100, the landlord deliberately or negligently fails to
supply running water, hot water, heat, sanitary facilities, or
other essential services, the tenant may give written notice to the
landlord specifying the breach and may immediately

               (1)  procure reasonable amounts of hot
water, running water, heat, sanitary facilities, and essential
services during the period of the landlord's noncompliance and
deduct their actual and reasonable cost from the rent;

               (2)  recover damages based on the
diminution in the fair rental value of the dwelling unit;  or

               (3)  procure reasonable substitute
housing during the period of the landlord's noncompliance, in which
case the tenant is excused from paying rent for the period of the
landlord's noncompliance and, in addition, may recover the amount
by which the actual and reasonable cost exceeds rent.

               (b)  A tenant who proceeds under this
section may not proceed under AS 34.03.160 as to that breach.

               (c)  Rights do not arise under this
section until the tenant has given written notice to the landlord. 
Rights do not arise under this section if the condition was caused
by the deliberate or negligent act or omission of the tenant, a
member of the tenant's family, or other person on the premises with
the tenant's consent.

Footnote 11:

     AS 34.03.160(b) (emphasis added).  Subsection .160(b)

               Except as provided in this chapter, the
tenant may recover damages and obtain injunctive relief for any
noncompliance by the landlord with the rental agreement or AS
34.03.100, 34.03.210, or 34.03.280.  

Footnote 12:

     AS 34.03.180(a)(2).

Footnote 13:

     Similarly, on appeal, even though she acknowledges that AS
34.03.180 did not limit McCabe's and Sullivan's claims, Subramanian
incorrectly maintains that they were entitled to damages for
diminished rental value only if they proved a breach that rendered
the premises "unsuitable for use" -- in other words, if they proved
the equivalent of a "material" breach under subsection .160(a).  In
support of this argument, Subramanian mistakenly  relies on Berrey
v. Jeffcoat, 785 P.2d 20, 22 (Alaska 1990), which dealt with a
commercial lease that was therefore not subject to the provisions
of the Uniform Residential Landlord and Tenant Act.  Accordingly,
Berrey's discussion of Restatement (Second) of Property Sections
5.4 and 5.5 (1977) is inapposite.  These restatement sections do
not reflect the act's provisions, which create special remedies for
"material" noncompliance and noncompliance involving "essential
services," while allowing tenants to recover damages for "any"
other noncompliance.  AS 34.03.160(a)-(b); AS 34.03.180.  

Footnote 14:

     See AS 34.03.100(d); Coburn v. Burton, 790 P.2d 1355, 1357-58
(Alaska 1990) (prohibiting such a shift).

Footnote 15:

     Dickerson v. Geiermann, 368 P.2d 217, 219 (Alaska 1962)
(footnotes omitted).

Footnote 16:

     Given our decision to remand for reconsideration, it would be
premature to consider McCabe's and Sullivan's claims that the
superior court erred in failing to award them damages for
diminished rental value.

Footnote 17:

     AS 34.03.070 provides, in relevant part:

               (b)  Upon termination of the tenancy,
property or money held by the landlord as prepaid rent or as a
security deposit may be applied to the payment of accrued rent and
the amount of damages that the landlord has suffered by reason of
the tenant's noncompliance with AS 34.03.120.  The accrued rent and
damages must be itemized by the landlord in a written notice mailed
to the tenant's last known address within the time limit prescribed
by (g) of this section, together with the amount due the tenant.

               . . . .

               (d)  If the landlord wilfully fails to
comply with (b) of this section, the tenant may recover an amount
not to exceed twice the actual amount withheld.

Footnote 18:

     Because Sullivan's entitlement to damages under this provision
requires a factual finding of wilfulness, see AS 34.03.070(d),
quoted supra note 17, we decline to decide the issue here.

Footnote 19:

     Pluid v. B.K., 948 P.2d 981, 984 (Alaska 1997) (citation and
internal quotation marks omitted).