COURT OF APPEALS SAYS TENANT NOT LIABLE FOR FIRE DAMAGE

The Court of Appeals recently issued its decision in Maryland Arms Limited Partnership v. Connell. The court recommended this decision for publication. The issue in this lawsuit was whether the landlord or the tenant should be liable for damage to an apartment unit when neither party's negligence caused the damage. The Court of Appeals held that the landlord should be held liable in such a situation. As such, the case will now stand for the proposition that a tenant cannot be held liable for his/her actions that damage the property unless the damage is caused by the tenant's negligence

The facts were as follows and were not disputed by either the tenant or the landlord:

- A fire occurred in the tenant's apartment and caused $8,000 worth of damages while the tenant was asleep.

- The fire started from a hair dryer owned by the tenant which was plugged into the electrical outlet.

- The tenant did not know that the hair dryer was defective when it was left plugged into the electrical outlet.

- The tenant and the landlord both agreed that the tenant was not negligent in causing the fire, as she had no indication that anything was wrong with the hair dryer when she left it plugged into the outlet.

The rental agreement that was signed by both the tenant and landlord included the following language:

"Lessee shall be responsible for all intentional and negligent acts or breaches of this Lease by the Lessee, Lessee's occupants, guests, or invitees. Lessee shall be liable for all damage to the premises and appliances and equipment belonging thereto, in any way caused by the acts of Lessee, Lessee's occupants, guests and invitees."

As a result of this language, the trial court (Judge Michael Brennan of Milwaukee County) entered judgment for the landlord and against the tenant.

A majority of the Court of Appeals (the court was divided, with one judge dissenting) reversed the trial court's ruling and remanded the case to the trial court, directing it to enter judgment for the tenant.

In essence, the Court of Appeals voided the underlined lease language because it found the provision contrary to Wisconsin landlord-tenant law, specifically Sec. 704.07, Wis. Stats.

Sec. 704.07 states that a landlord must repair the property unless the repairs were made necessary by the tenant's negligence. Sec. 704.07 also states that a tenant must repair damage if it results from the tenant's negligence.

The Court of Appeals did admit that sec. 704.07 does not specifically address the issue of who should be responsible in a situation where the damage was not caused by the negligence of either the landlord or the tenant. The logical outcome is to look to the rental agreement and determine what the parties agreed to in such a situation. If the court did so, the tenant would be liable for the cost of repairing the fire damage.

Instead, the Court of Appeals held that the only logical conclusion after reading the statute is that the landlord must pay for the damage because the tenant's negligence did not cause it.

This is just another example of the courts going out of their way to protect the tenant at all expenses. It seems as if the Court decided the outcome it wanted and then did whatever it could to piece together an argument to support it, rather than applying the law as written and arriving at the outcome. I'm assuming the landlord had insurance and the Court felt that, as such, the landlord would be better able to handle the repair costs.

Landlords already have statutes and administrative code regulations that tell them what they can and cannot include in their rental agreements. Now we have a case that essentially says that even if a statute or regulation doesn't prevent you from including certain language in your rental agreement, if we (the Court of Appeals) don't like the provision included, then we will find a way to make it void and unenforceable.

The only voice of reason appears to be in the dissent, which is authored by Judge Ralph Adam Fine -- who, by the way, was once a member of my law firm Petrie & Stocking S.C. (we only hire the smartest and brightest) -- who concluded that while the landlord would have a duty to repair the fire damage, there is nothing in the statute that requires the landlord to be responsible for the cost of the repairs in the end, especially when the parties agree differently in the rental agreement.

It is still unknown whether the landlord will appeal this decision to the Supreme Court of Wisconsin, or, if it does, whether the "supremes" will agree to hear the case. So, for now at least, it appears we have precedent in this case that is very favorable to landlords.

What are your thoughts on this decision?