Opinion
No. 15–P–1592.
09-30-2016
Matteo GALLO, trustee, v. Marin MARINELLI.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Matteo Gallo (landlord), as trustee of the Ocean View Nominee Trust, brought the underlying summary process action against the defendant, Marin Marinelli (tenant), seeking possession of a basement apartment in the North End section of Boston. After a jury-waived trial, at which the tenant appeared pro se, a Housing Court judge found that the tenant owed the landlord for unpaid rent, but that those damages were offset by damages owed by the landlord for interference with the tenant's quiet enjoyment of the property. The judge also concluded that the landlord was liable for failing to pay the tenant interest on the deposit of his last month's rent, which the judge doubled pursuant to G.L. c. 93A. The judge issued his decision by means of written findings of fact, rulings of law, and order for judgment. The landlord filed a motion to amend the judgment, which included a request for attorney's fees pursuant to the terms of the lease. The judge denied the motion in full. In his order, the judge noted that “[t]he docket does not reflect the entry of judgment,” and that the tenant's payment of the amount due the landlord pursuant to the order for judgment was timely. The next day a “Judgment of Summary Process for Defendant” issued, showing a zero balance due from the parties.
On appeal, the landlord claims error in the judge's award of damages for interference with quiet enjoyment and for interest on the last month's rent. He also claims the judge erred in refusing to admit in evidence a report of a Boston housing inspector. Finally, he contends that he should have been awarded attorney's fees and late fees. We vacate the portions of the judgment and the order for judgment awarding interest on the last month's rent, and doubling that award pursuant to G.L. c. 93A. We also vacate the portions of the order on the landlord's motion to amend the judgment with regard to attorney's fees and the award of interest on the last month's deposit, and we remand the matter for further consideration.
The tenant did not file a brief, but appeared at oral argument and requested the judgment of the Housing Court be affirmed.
Background. The landlord and tenant entered into a lease agreement in 2008, at which time the tenant paid the landlord $1,350 in advance for his last month's rent. The landlord placed that money in an noninterest-bearing account at Citizen's Bank. In 2011, a faulty fire hydrant caused water damage to the apartment. The judge found that while the landlord attempted to remedy the problem, a closet in the apartment continued to show water damage. This finding was supported by a Boston housing inspector's report dated March 24, 2015, directing the landlord to identify the source of the dampness, remedy it, and repair the closet. There was no dispute that the tenant failed to pay rent for February, March, April, or May, 2015, in the amount of $1,700 per month.
The judge found the tenant breached the lease agreement and was liable for damages of $6,800, representing four months of unpaid rent. She also found that as a result of the persistent water damage in the closet, the landlord had interfered with the tenant's quiet enjoyment of the apartment and awarded the tenant damages in the amount of three month's rent, $5,100, pursuant to G.L. c. 186, § 14. Finally, the judge concluded that the landlord violated G.L. c. 186, § 15B(2)(a ), by failing to pay the tenant interest on his last month's rent, and she doubled the damages pursuant to G.L. c. 93A, concluding that the landlord's failure to pay interest was knowing and wilful. Ultimately, the judge concluded that upon the tenant's payment of $890 to the landlord, the tenant would be entitled to retain possession of the apartment.
The amount of $890 represents the unpaid rent ($6,800), less damages for breach of quiet enjoyment ($5,100), less the doubled interest ($810).
The landlord then moved to strike the award of interest on last month's rent and to amend the judgment to include an award of attorney's fees and late fees pursuant to the lease addendum. The motion was denied. This appeal followed.
Discussion. 1. Quiet enjoyment. The landlord claims that there was insufficient evidence that he had interfered with the tenant's right to quiet enjoyment of the apartment. We review the evidence in the light most favorable to the tenant. Parks v. Johnson, 46 Mass.App.Ct. 905, 906 (1998). “The covenant of quiet enjoyment pertains to ‘acts or omissions that impair the character and value of the [leased premises].’ “ Kelly v. Jones, 80 Mass.App.Ct. 476, 478 (2011), quoting from Doe v. New Bedford Hous. Authy., 417 Mass. 273, 285 (1994). “We have interpreted this obligation to mean that the covenant of quiet enjoyment protects a tenant from serious interference with [his] tenancy.” Jablonski v. Casey, 64 Mass.App.Ct. 744, 747–748 (2005). In general, “it must be demonstrated that the landlord had notice of or reason to know of the presence of [the defect] and failed to take appropriate corrective measures.” Al–Ziab v. Mourgis, 424 Mass. 847, 851 (1997). Here, the judge acted within her discretion when she credited the tenant's testimony that the landlord had notice of the water damage in 2013 and had not remedied the problem when the property was inspected on March 24, 2015. This evidence, when viewed in the light most favorable to the tenant, was sufficient to establish that the landlord interfered with the tenant's quiet enjoyment of the property.
2. Inspection report. The landlord also claims that the judge should have admitted in evidence an uncertified copy of a report by a Boston housing inspector, having admitted a similar report earlier in the trial. “We do not disturb a judge's decision to admit evidence absent an abuse of discretion or other legal error .” Zucco v. Kane, 439 Mass. 503, 507 (2003). The initial report, dated March 24, 2015, was offered by the landlord and admitted without objection. The second report, dated April 10, 2015, was also offered by the landlord. The tenant objected, albeit prematurely, and the second report was excluded from evidence. The landlord's argument that it was unfair to admit one report, but not the other, is not persuasive. A certified copy of such an inspection report is admissible and considered prima facie evidence of the facts stated therein. See G.L. c. 239, § 8A. Here, where it is undisputed that the challenged report was not certified, the judge acted within her discretion.
3. Late fees. Under the terms of the lease, a late fee is assessed if the rent, which is due on the first day of the month, is not paid by the seventh day of the month. The trial judge found this provision unenforceable because she concluded that under G.L. c. 186, § 15B(1)(c ), late fees cannot be imposed until thirty days after the rent becomes due. As this is a question of law, we review the judge's decision de novo. Rosnov v. Molloy, 460 Mass. 474, 476 (2011). The landlord argues that, as it is undisputed that the tenant failed to pay rent for four months, the judge should have imposed late fees for each delinquent payment after the passage of thirty days. However, no provision of G.L. c. 186 provides for the imposition of late fees except as provided as a lease term. Moreover, G.L. c. 186, § 15B(8), as appearing in St.1978, c. 553, § 2, provides that “[a]ny provision of a lease which conflicts with any provision of this section ... shall be deemed to be against public policy and therefore void and unenforceable.” Accordingly, we discern no error in the judge's conclusion that the late fee provision in the lease was unenforceable.
“No lease or other rental agreement shall impose any interest or penalty for failure to pay rent until thirty days after such rent shall have been due.” G.L. c. 186, § 15B(1)(c ), as appearing in St.1978, c. 553, § 2.
4. Interest on last month's rent. The judge concluded that the tenant was entitled to interest on the deposit of his last month's rent, even though it was undisputed that no interest had been paid on the deposit. She based her decision on G.L. c. 186, § 15B(2)(a ), as appearing in St.1978, c. 553, § 2, which provides that the lessor shall “pay interest at the rate of five per cent per year or other such lesser amount of interest as has been received from the bank where the deposit has been held.” The judge reasoned that “[i]mplicit in this statute, which is intended to compensate the tenant for the loss of the use of his or her money for a significant period of time, is that interest will accrue on the money being held.” She further explained in her order denying the landlord's motion to amend the judgment that “[a] landlord cannot avoid the intent of the statute by choosing to use a bank that does not pay interest.”
We review statutory interpretation de novo. Rosnov v. Molloy, supra. The premise of the judge's ruling, that the intent of the statute is to compensate the tenant for loss of his money, is incorrect. Deposits of “last months' rents are, with certain limitations, the property of the landlord, not the tenant.” Neihaus v. Maxwell, 54 Mass.App.Ct. 558, 561 (2002). “The landlord is not required to set aside the tenant's last month's rent or to place it in a bank account; however, he is required to pay interest on it at five per cent or any lesser rate paid by the bank, if the money is, in fact deposited.” Id. at 561 n. 6.
By contrast, security deposits, which remain the property of the tenant, must be placed “in a separate, interest bearing account in a bank, located within the commonwealth under such terms as will place such deposit beyond the claim of creditors of the lessor.” G .L. c. 186, § 15B(3)(a ), as appearing in St.1978, c. 553, § 2. There is no such provision mandating the placement of the last month's rent in an interest-bearing bank account. We therefore conclude that only when the lessor places a tenant's last month's rent in an interest-bearing account is the tenant entitled to interest. Since it is undisputed that, in this case, the landlord deposited the last month's rent in a noninterest-bearing account, the tenant was not entitled to interest. Accordingly, we vacate the award of interest on the deposit of the last month's rent and the corresponding award of double damages pursuant to G.L. c. 93A.
This court addressed the application of G.L. c. 186, § 15B(2)(a ), in Karaa v. Yim, 86 Mass.App.Ct. 714. (2014). There the trial judge's award of interest on the deposit of the last month's rent was affirmed on appeal. However, in that case, unlike the case before us, the last month's rent was actually deposited in an interest-bearing account.
5. Attorney's fees. In denying the landlord's request for attorney's fees, the judge relied upon G.L. c. 186, § 11A, in concluding that the landlord “cannot recover monies other than rent or costs and statutory interest in a summary process action.” However, G.L. c. 186, § 11A, inserted by St.1987, § 381, applies only to termination of leases for “other than dwelling purposes.” Because it is undisputed that the tenant occupied the property as a dwelling, this statute does not apply.
It is well established that “parties may provide in an agreement that, in certain circumstances, one of them may be obligated to pay the other's attorney's fees, incurred in asserting rights under the agreement.” Carter v. Warren Five Cents Sav. Bank, 409 Mass. 73, 80 (1991). “The interpretation of a contract presents a question of law for the court, except to the extent disputed facts bear upon such interpretation.” USM Corp. v. Arthur D. Little Sys., Inc., 28 Mass.App.Ct. 108, 116 (1989). Here, the lease addendum, which was signed by both the landlord and the tenant, provides that the tenant is liable for costs and attorney's fees incurred by the landlord “in connection with the collection of rent or any legal proceeding.” We see no reason why the tenant should not be held to the terms of his bargain. Accordingly, we vacate the portion of the order on the motion to amend the judgment that denies the award of attorney's fees and remand to the Housing Court for a determination of what fees were incurred in connection with the collection of rent or any legal proceeding.
We note that in a lease that provides for the recovery of attorney's fees by a landlord, G.L. c. 186, § 20, inserted by St.1977, § 159, § 1, creates an implied covenant that the tenant can recover “reasonable attorneys' fees and expenses incurred by the tenant as the result of the failure of the landlord to perform any covenant or agreement on its part to be performed under the lease or in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease.” We leave it to the trial judge to determine whether such an award is appropriate here.
Conclusion. Those portions of the judgment and order for judgment awarding interest on the deposit of the last month's rent and doubling that award pursuant to G.L. c. 93A are vacated. The judgment and order for judgment are otherwise affirmed. The portion of the order on the landlord's motion to amend the judgment denying the landlord's request for attorney's fees and costs is vacated, as is the provision denying the landlord's request to strike the award of interest on the last month's rent. That order is otherwise affirmed. The matter is remanded for further proceedings consistent with this memorandum and order.
As to the landlord's request for attorney's fees on appeal, the landlord shall submit an application for fees and costs, with supporting documentation, within fourteen days of the date of this decision, and the tenant shall be afforded ten days thereafter to respond. See Fabre v. Walton, 441 Mass. 9, 10–11 (2004).