Tuesday, July 22, 2014

The Leave-Behinds

JW, LLC v. Ayer, 2014 VT 71

By Elizabeth Kruska

With the parties named Bryan and Debbie, it took everything I had not to write this summary to the tune of “Scenes From An Italian Restaurant” since the names “Bryan and Debbie” make me think of “Brenda and Eddie.” If anyone wants to write a verse or two, leave it in the comments and maybe we can make a song. It might be the first-ever song parody written about landlord-tenant law.

Bryan and Debbie rented a home from JW, starting in 2005. It was relatively new and in great condition when they moved in. They lived there until 2012 with their kids, dogs, chickens, and all their personal property. They didn’t pay rent in March and April 2012. They did pay their May 2012 rent, plus $300 in arrears on their back rent.

JW, the landlord, filed for eviction in July. The court issued a rent escrow order. That’s when, during an eviction, tenants can continue to pay their rent, but they pay it into the court while the case is pending instead of paying the landlord. Bryan and Debbie paid part of their August rent, but not all of it. The opinion isn’t totally clear, but it appears they did not pay June or July’s rent.

The court issued a writ of possession on August 10, which the sheriff served to Bryan and Debbie on August 22. The sheriff tried to give it to the tenants, but they refused to accept it. He made a note of this, left the paperwork with them, and filed the return of service with the note back with the court.

The writ of possession said that they had to vacate the home by midnight of September 6. This was exactly 15 days after service of the writ back in August. On September 7, JW showed up at the house with his lawyer and found that the home was full of Bryan and Debbie’s personal property, including lots of tools, a muzzleloader, and an ATV. It isn’t clear from the opinion whether the people were also there when he arrived. Some stuff left behind (probably whatever was obviously garbage) got thrown out. Some was held by JW. JW then had to have the home cleaned and repaired before re-renting to someone else.

As of the date of the writ, Bryan and Debbie were locked out and not able to return to the property. JW would not return their left behind belongings when he re-took possession of the property pursuant to the writ. He had two reasons he felt he could do this. First, there’s a statute involving abandoned property. If a rental property is abandoned, and personal property other than trash is left behind, the landlord must notify the tenant in writing that he intends to dispose of it after 60 days. The landlord has to keep the items safe during those 60 days. The tenant can claim the items by giving notice to the landlord with a description of the property and paying a storage fee. If the tenant doesn’t do that within that time, it becomes the landlord’s property. If a claim is made, the landlord has to give it back.

In real life, someone might move out of a property and accidentally leave something behind. The landlord, upon realizing there’s a “leave-behind” (isn’t that a fun phrase? I think the credit goes to an episode of Seinfeld), has to send notice to the tenant and give 60 days to pick it up. If the tenant claims it, it’s his. If the tenant doesn’t claim it, it becomes the landlord’s. Oops, when you moved out you left behind your Mickey Mantle rookie card? The landlord can’t get rid of it unless he or she followed these rules.

JW also looked at another statute, which has to do with eviction. That one says that 15 days after a writ of possession is served, the landlord can dispose of any personal property left behind without notice to the tenant or the owner of the belongings. You got evicted and left behind your Mickey Mantle rookie card? Too bad, so sad – the landlord can dispose of it. Even more – your buddy came over and left his Mickey Mantle rookie card at your house and then you got evicted and left it behind? Sorry. It becomes the landlord’s, and your friend is probably mad at you.

At first, JW thought the stuff Bryan and Debbie left behind was abandoned, and wanted them to pay him $10,000 for removal and storage costs. From the opinion we don’t know why they weren’t paying rent, but it’s reasonable to guess they didn’t have $10,000 to pay him for their stuff to be returned. They thought $10,000 was unreasonable and counteroffered $2700. The parties ended up in court, and the court ordered that the property be returned. JW gave back some, but not all their property that he had. He then also moved for a writ of attachment.

There was another court hearing, which consolidated the writ of attachment with damages. Bryan testified about the property JW still had – mostly tools, which he needed back to be able to do his job as a mechanic. JW argued that he was free to do with the property what he chose. He argued that the statute dealing with eviction was what rules, and that after 15 days of service of the writ of possession, he would get possession of the items inside.

After the hearing the court determined the total damages to JW to be $31,721. The court also determined that once 15 days passed from the service of writ of possession, that JW was entitled to possession of personal property left on the premises.

Then things got weird. The court said that the 15-day statute only applies to trash, and that if there is valuable property, the landlord still has to follow the 60-day storage and return rule. The court said that here, since the tenants asked for the property back at the time of the eviction and before it was moved or stored, that JW couldn’t just seize it. Further, the court said that JW couldn’t take and hold the property to satisfy any of the debt JW incurred from storage, cleaning, and repairs. The court ordered that all Bryan and Debbie’s personal property then in JW’s possession be given back within 72 hours.

JW appealed, which is how we get here.

SCOV looks this over and determines that the 15-day rule is exactly what applies in this case. People leave rental properties for different reasons. Anyone who has ever moved or had a tenant move from a rental space, knows that people generate a whole lot of stuff, and inadvertently things get left behind sometimes. There’s no such thing as a Writ of Finder’s Keeper’s when it comes to someone moving out voluntarily. If a tenant departed voluntarily and made a mistake – the landlord doesn’t just get to keep the property without letting the person know and giving him or her a chance to come get it.

On the other hand, if someone is forced out through an ejectment, they do get notice that they have to leave. By the time they’ve been served with the writ of possession by the sheriff (and it’s not like it’s short notice – there are court hearings before this happens), they’ve had plenty of time to round up their tools and baseball cards and tube socks so that when they’re out, they’re out for good. That’s the point of the writ of possession; it gives lawful possession of the premises and its contents back to the landlord.

SCOV takes some issue with the trial court’s notion that only trash can be disposed of. First of all, the statute says “dispose of” which just means “get rid of.” No method is specified, so that can mean throwing it away, but it can also mean giving it away, donating it, selling it, or destroying it. A stack of left-behind towels? Give them to the animal shelter. A perfectly-usable bicycle? Give it to the thrift shop. Those are probably acceptable methods to dispose of everyday stuff that isn’t obvious trash. A landlord can use his or her discretion to do whatever seems smart.

Here, since the tenants were obviously evicted after a court proceeding and served with the writ of possession by the sheriff, the ejectment rule applies and the abandonment rule doesn’t. The landlord had no responsibility to hold and store the property after re-taking the rental premises.

SCOV goes on to address a public policy concern from both angles. The Court recognizes that a tenant removed by a writ of possession has to get out in a hurry, and probably leaves behind some belongings. It seems unfair to prevent the tenant from being able to retrieve them. On the other hand, to get to that point, the landlord has likely already lost income via unpaid rent, had to file an eviction action in court, and needs to be able to clear out the space fairly efficiently in order to re-rent it to new tenants.

SCOV also goes on to say that an ejectment doesn’t confer ownership of personal property to a landlord. The point is that a landlord can dispose of left-behinds without incurring liability for them. Thus – the court’s order to return property is actually inconsistent with the statute, so it gets reversed.

And as the late, great Billy Mays used to say, But wait! There’s more!

A landlord doesn’t get to come out ahead from the value of the property left behind after the 15-day ejectment period. The landlord is shielded from liability for disposal, but doesn’t get to get a windfall from the property. We in the biz call that “unjust enrichment.”

A tenant in this situation can actually make an unjust enrichment claim against a landlord who benefits from property left behind. The tenant would have to show that a benefit was conferred on the landlord, the landlord accepted the benefit, and it would be inequitable for the landlord not to compensate the tenant for the amount of benefit received. If the landlord in question found the Mickey Mantle rookie card and sold it for a hefty sum, the tenant could sue for the amount for which the card sold. (Sidenote: I am not, and have never been a Yankee fan, but I’d be pretty excited to find that card.)

In this case SCOV remanded the case back to the trial court for further findings relative to any unjust enrichment claim. Since there was already a judgment in favor of the landlord, SCOV says that any unjust enrichment finding should be offset against the landlord’s judgment. Although the opinion doesn’t say so, if the value of the left-behind property went beyond the $31,721 judgment, the tenants could argue that overage could be returned to them.

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