Teller v. McCoy

¶1concurring in part, dissenting in part:1

¶2It is a basic principle of American jurisprudence that a court cannot gratuitously pronounce what they envis*397age the law should be but must limit themselves to rulings in the context of a justiciable case of controversy. U. S. Const., art. Ill, § 2; W. Va. Const., art. 8, § 3. The case at bar arose before the effective date of W.Va. Code, 37-6-3[1978] and the justiciable question presented was limited to whether under prior evolving common law there had developed any implied covenant of habitability in residential leases, and if such covenant existed, what remedies were available to enforce it. I do agree with the majority’s resolution of these questions insofar as they hold that before W.Va. Code, 37-6-30 [1978] became effective it would be proper to imply a covenant of habitability and that such covenant was not independent of the duty to pay rent. Everything else in the majority opinion is pure dicta and represents nothing more than the philosophy of the majority writer; its gratuitous pronouncements, arising as they do dehors of a justiciable case or controversy, cannot constitutionally be considered the decisional law of this State and the lower courts are not properly bound to follow them, nor should they.

¶3The majority opinion would imply that everyone has a natural law right to accommodations which would reflect credit on the Ritz Hotel. Experience in the last thirty years, however, adequately demonstrates that the creation of new law does not usually create new wealth; in fact, wealth can be equitably redistributed only after, *398not before, it has been created. Numerous recently decolonized, underdeveloped countries have learned to their chagrin that the social philosophy of the London School of Economics which stressed wealth redistribution over wealth generation might have been applicable to the United Kingdom of the 20th century but does not apply to primitive nations operating at the level of production which England enjoyed the day William I put the arrow through Harold the Saxon’s eye.

¶4The inability to redistribute wealth which does not exist which inexperienced administrators in former colonies found to their disappointment to be an unrepeatable law of nature in the 1960s will daunt the majority’s effort to create first class housing in West Virginia. The leading cases adopting an implied covenant of habitability arose predominantly in urban areas plagued by extensive ghettos in which slum dwellers were charged almost as much for slum housing as “middle class” people were charged for acceptable housing. Part of this phenomenon was the result of de facto racial discrimination, part of the urge of the poor to live in a hospitable community, and part of a lack of social skills which would permit the exploited to seek alternative accommodations. See Boston Housing Authority v. Hemingway, 363 Mass. 184, 293 N.E.2d 831 (1973) (Boston, Massachusetts); Green v. Superior Court, 10 Cal.3d 616, 111 Cal. Rptr. 704, 517 P.2d 1168 (1974) (San Francisco, California); Javins v. First National Realty Corp., 428 F.2d 1071 (D.C. Cir. 1970) (Washington, D.C.).2 Most of these areas *399make West Virginia’s largest city of Charleston, which has a population well under eighty thousand, look like a virtual suburban haven. To the extent that deplorable conditions such as those found in Boston Housing Authority, Green and Javins3 exist in West Virginia they should be corrected; no person should be required to pay the same amount of money for a shack that he would pay for a modern apartment and no one should be permitted to be exploited in the market place because he is a different color or has any other background which engenders prejudice. However, a covenant of habitability cannot serve to correct every conceivable inconvenience that interferes with a tenant’s enjoyment of leased premises. In my estimation, a covenant of habitability amounts only to a landlord’s promise that if something is provided with a leased premise then it will work absent some specific disclaimer. For example, if an elevator is provided, the tenant can expect it to operate; if a toilet is provided, the tenant can expect it to flush; if a heater is provided, the tenant can expect it to heat; but, a tenant cannot expect a landlord to increase the size of rooms, provide elaborate lighting, or install the most expensive heating system ever devised by man.

¶5I do not dispute for a moment that it would be wonderful if everyone could inhabit housing meeting both his taste and his budget but, unfortunately, the majority opinion cannot build houses, lower rents, or in any other way create more housing than already exists. Many people live in quarters which are less than luxurious because they cannot afford to pay more than what they already pay for rent. Ritz Hotel type housing cannot be provided where none otherwise exists unless someone pays for it. In our economy that means either *400(1) the landlord, (2) the tenant, or (3) the government. The government is trying to do its share, but its resources are limited.4 The landlord cannot make substantial renovations without passing his costs on to the tenant, and the tenant may then find that he has been given more luxury than he can afford. It is very much as if one were to write an opinion which implied that everyone had a natural law right to a Rolls Royce and that an action in warranty would lie against all other automobile manufacturers if they provided anything less elegant. Many damage awards might follow, but eventually all other automobile manufacturers would be out of business, notwithstanding that very few Rolls Royces had come into the hands of those whom the opinion was intended to help.

¶6We do not do the people of this State a favor by taking delapidated houses off the rental market if concomitantly we cannot provide alternative housing.5 Furthermore, *401we should not place ourselves in the position of the totalitarians who, allegedly, come the Revolution, intend to force feed strawberries and cream down the throats of everyone, notwithstanding any individual’s abhorrence of strawberries and cream.6

¶7While I find the greater portion of the majority opinion to be distasteful, I am especially distressed by the gratuitous pronouncements concerning both payment of rent into court and waivers, as neither question in the context of the new statute was fairly raised. I feel compelled to address these issues because they were addressed by the majority, if only to demonstrate that far greater refinement will be required of this area of the law as the court is educated by arguments made in the context of well developed records. First among the tasks of the future will be the development of a detailed typology of differing substandard housing situations to which we may apply rules calculated at all times to maximize *402availability of housing while minimizing exploitation. In that regard, a judicial definition of exploitation is itself a Herculean task; certainly it has vexed economists since time out of mind.

¶8The majority obviously does not understand the purport of W.Va. Code, 37-6-30(c) [1978] which will apply to all future cases which provides:

None of the provisions of this section [warranty of habitability] shall be deemed to require the landlord to make repairs when the tenant is in arrears in payment of rent.

¶9This section, in my opinion, effectively precludes the requirement that a landlord make a motion and present supporting proof before rent must be paid into the court during an action based on a covenant of habitability. Even absent that section, logic and practical economics dictate automatic payment of rent into court as a condition precedent to asserting the defense of violation of the covenant of habitability in an eviction proceeding. Clearly the tenant expected to pay rent when he leased the premises; therefore, he is faced with no unforeseen expense and does not stand to suffer since if he is successful all or part of the amount paid will be returned to him. On the other hand, the landlord stands to suffer significantly if a displeased tenant can avoid rental payment simply by pleading breach of a covenant of habitability without providing any security for payment to a landlord who may be ultimately vindicated. In reality, the majority has inadvertently increased the costs to all tenants by forcing landlords to pass along to all tenants, where the elasticity of demand for housing is low, the cost of tenants who do not pay rent. Under the majority opinion, if a landlord seeks to evict a nonpaying tenant, the tenant can file a frivolous answer based on a breach of covenant, demand a hearing, and deprive the landlord of rent until final resolution of the dispute, absent a motion by the landlord. In those circuits where the trial judges are impartial, there will be a liberal granting of these motions and a requirement that money be paid *403into court; nonetheless, the cost of doing business has increased considerably. I predict landlords will exact higher deposits where they can, and that where landlords find themselves vexed by unwarranted lawsuits they will push up everyone’s rent to cover their costs.

¶10In this regard the neutrality of the process has not been improved; the burden of lack of neutrality has merely shifted from the lessee to the lessor. Under prior law, where the covenants to maintain the premises and the covenant to pay rent were considered independent, the tenant suffered the burden of the process as he could seldom sustain an ancillary lawsuit to recover rent paid for inadequate dwellings after an eviction proceeding. Now, however, the landlord is burdened because most tenants are judgment proof; it is not practical to sue absconding tenants in an effort to get blood from proverbial stones. As tenants know this, they will soon become accustomed to awaiting an eviction proceeding, filing an answer claiming breach of warranty, demanding a hearing, and delaying the landlord in his eviction proceeding for at least four months. In that event the process — not the merits of the case either way — will deny just landlords of their rightful recompense. However, if the tenant is required to pay money into court immediately, while the landlord is inconvenienced with regard to his cash flow, he is secure in his ultimate payment if he is without fault. Furthermore, there is much less likelihood that the process will be abused and that frivolous answers will be filed merely for the purpose of extending free tenancies. Moreover, the tenant will also be protected in a way he never was before. Thus either by an irrepressible desire to make a populist speech or an enormously unrefined thought process the majority opinion has deprived us of an opportunity to improve the total process rather than merely shifting the burden of its imperfections.

¶11The majority’s holding that waivers are per se contrary to public policy goes farther than necessary to avoid the slum ghetto problem. It is in this regard that we shall be required to develop a detailed typology of *404different substandard housing situations. Printed leases which automatically provide a pro forma waiver of all implied covenants of habitability should not be automatically enforceable; however, where two intelligent parties actually bargain for less than elegant premises, the amount of the rent charged reflects that bargain in a reasonable way, and the court can infer from the surrounding circumstances that no unfair advantage has been taken of a tenant based on the landlord’s exploitation of the inelasticities of demand for housing, the contract should be able to provide for a waiver. In this area the Court should be able to go behind the printed contract on grounds akin to those which recognize special rule with regard to contracts of adhesion. This is in consonance with a similar holding of ours in the field of arbitration, Board of Education of the County of Berkeley v. W. Harley Miller, Inc., _ W.Va. _, 236 S.E.2d 439 (1977) where we distinguished between arbitration clauses which are thrust upon unsuspecting consumers and arbitration clauses for which the parties bargain. While with regard to residential rental property the contract usually has a non-commercial consumer on one side and an experienced businessman lessor on the other, the parties can nonetheless intelligently bargain for a waiver, and the primary evidence of such bargaining process is a rent which reasonably reflects the value of the property.

¶12The courts are aware of the inelasticity of demand for housing in some parts of West Virginia and the cases cited by the majority have properly attempted to avoid outrageous exploitation of market rigidities in comparable circumstances in other jurisdictions where lessors charge high rents from unfortunate people and provide nothing in return. Consequently a court should be able to look to certain objective evidence in determining whether the accommodations were bargained for or whether the landlord has exploited the distress of his tenants. Such factors as the price of the residence, the employment record of the tenant, the age group of the tenant, the level of social skills of the tenant, the length *405of the lease, and the overall return on the rented premises should all bear on the problem. Where tenants are routinely of a class of itinerants who rent month to month, or taking a lease, routinely leave upon no notice, then the landlord must obviously rent at a higher monthly rental than if he had tenants who have been in the same dwelling for years. If the community is composed of renters who present peculiar problems, such as students or persons with very low social skills who routinely tear the place apart, then this unpleasant fact of life must bear upon the cost of doing business and must be reflected in the rent; however, where most tenants are retired persons who have owned their own homes, have a high sense of responsibility, and routinely provide their own minor maintenance, then the market rent should be appropriately lower. The reader may object in this regard that I have unfairly characterized some classes of tenants and quite possibly I have. That merely reinforces the preeminent deficiency of the majority opinion, i.e., making law which exceeds the requirements of the factual context in which it arose. Ultimately a competent circuit court should have the opportunity to develop the question of whether any particular subsam-ple of tenants present peculiar problems; until that time I must rely upon my own quite inadequate experience to point out the need for further development of the rules if we are not to achieve a result entirely contrary to what we intended.

¶13While the amount of rent alone is not entirely disposi-tive of the issue of whether objectively the waiver was intelligently bargained for, nonetheless, it is the starting point. Where delapidated premises are rented to persons for prices which are equal to or almost equal to those charged for adequate housing, then the burden should be upon the landlord to show the market conditions which require him to charge the rents he charges and to justify the contract by demonstrating that due to peculiar conditions his overall rate of return to capital and his own labor does not exceed a fair rate of return.

¶14*406I believe that the majority opinion is a philosophical speech which is not only uncalled for, but which demonstrates a totally deficient lack of refinement. As with all populist pronouncements in the modern world, the majority opinion has attempted to use a cudgel wielded by a cyclops to do work which can be accomplished only by' a skilled athlete using a rapier. There is substantial wisdom to the common law tradition which countenances evolution of the decisional law only in the context of real cases and controversies. Discrete changes predicated on detailed development of factual situations helps preclude cyclopsesque blundering, i.e., the making of grandiose policy upon insufficient information.