Court: Landlord Is Not Responsible To Tenant For Fire Damage
Written by: Alan Nochumson
A recent decision by a federal district court in Western Pennsylvania stressed how most tenants in multiunit buildings do not clearly understand the legal ramifications when the leased premises are destroyed through no fault of their own and the difficulty of recovering against landlords for the resulting damages.
In Community Preschool & Nursery of East Liberty LLC v. Tri-State Realty Inc., the U.S. District Court for the Western District of Pennsylvania focused its inquiry on what caused a fire at a building owned by the defendant landlord, the first floor of which was leased to the plaintiff tenant to use as a child-care facility.
According to the opinion, the child-care facility leased the bottom floor of a two-story commercial office building located in Pittsburgh.
The lease entered into by the parties contained provisions whereby the landlord guaranteed not to impair the child-care facility’s quiet enjoyment of the leased premises and provided that, if the leased premises were partially damaged by fire or other casualty so as to render it unsuitable for use during the lease term, the landlord could terminate the lease without legal consequence.
After the lease was signed but before the child-care facility occupied the first floor of the building, the landlord received a certificate of occupancy from the city for the first floor of the building. That certificate of occupancy stated that “2nd floor to remain vacant,” the opinion said.
The landlord leased the second floor of the building to tenants even though the landlord did not receive a certificate of occupancy for use of the second floor or inspect the electrical system prior to giving possession to the tenants on the second floor, the opinion said.
Several months after one of the tenants on the second floor complained to the landlord about electrical outlets not working, a fire started there which overtook the entire building, damaging the first floor and rendering it unusable for the child-care facility, according to the opinion.
The investigative reports issued by the city’s fire department at the time of the incident and subsequent expert opinions retained by the parties were consistent in locating the start of the fire in the electrical wiring on the second floor, but no one ventured an opinion as to the actual cause of the malfunction, the opinion said.
After the landlord elected to terminate the lease pursuant to the fire and casualty provision, the child-care facility filed a complaint against the landlord in federal district court for negligence and breach of contract, among other things.
The federal district court dismissed these claims at the summary judgment stage of litigation.
In a nutshell, the court believed that both claims failed as a matter of law because the child-care facility did not and could not establish that the landlord proximately caused the fire.
The court first addressed the legal validity, or lack thereof, of the negligence claim.
The child-care facility argued that the landlord had a duty to maintain the leased premises, that the landlord breached that duty by failing to obtain a certificate of occupancy for the second floor and by allowing tenants to occupy the second floor, and that the breach caused the fire, which caused resulting damage to the first floor.
According to the opinion, while the landlord admitted that it had a duty and that damages resulted from the fire, the landlord disputed whether it breached its duty to the child-care facility by leasing the second floor to other tenants without obtaining a certificate of occupancy from the city.
The court pointed out whether the landlord breached its duty to the child-care facility was a red herring because, “assuming that [there] was a breach of duty, there [wa] s no evidence on record to support causation of the fire, an essential element of [the] plantiffs’ negligence claim.”
The court noted that, to determine whether any breach of duty proximately caused the child-care facility’s damages, it would look at whether a reasonable person would infer that the injury was the natural and probable result of the landlord’s breach of duty. The court closely reviewed the opinions issued by the fire investigators working for the city as well as the expert retained by the parties.
According to the court, the investigators and the experts all agreed that the cause of the fire was probably an electrical malfunction and none of them gave an opinion as to its specific cause. Rather, the court illustrated that “the experts described possibilities of what may have been the problem with the wiring, but none could say for certain what caused the electrical malfunction.”
From the court’s perspective, while there was some uncertainty as to the exact cause in-fact of the electrical fire, that factual dispute, although genuine, was not material because there was no evidence that the landlord’s alleged breach of duty was the proximate cause of the fire, leaving a gaping hole in the causal chain.
The federal district court then quickly disposed of the child-care facility’s argument that the doctrine of res ipsa loquitur, which in Latin translates to “the thing speaks for itself,” is sufficient to establish causation. In Pennsylvania, the doctrine of “res ipsa loquitur applies when there is no direct evidence to show cause of injury, and the circumstantial evidence indicates that the negligence of the defendant is the most plausible explanation for the injury,” the opinion said.
Since the child-care facility failed to offer evidence regarding the specific cause and because other responsible causes could not be eliminated by the evidence, the federal district court emphasized that the doctrine of res ipsa loquitur did not establish the requisite causation and the negligence claim would thus be dismissed on those grounds as well.
The court then quickly disposed of the breach of contract claim.
The court pointed out that the child-care facility could not establish that the landlord caused the fire that burned the building.
Moreover, the court stressed that the lease itself, which was freely signed by the childcare facility, allowed the landlord to unilaterally terminate the lease if the leased premises were impaired because of fire.
LESSONS LEARNED
The federal district court’s ruling in Community Preschool illustrates the perils a tenant faces when attempting to hold a landlord liable for the destruction of the leased premises.
In Community Preschool, the court highlighted the difficulty of establishing causation in these situations.
Moreover, the court pointed out that the parties had already agreed to a mechanism in the lease should there be such a destruction of the leased premises and that the landlord was merely exercising its rights under the lease. As such, the child-care facility, as implied by the court, had no one to blame but itself for the end result, which speaks volumes about the importance of fully understanding the terms and conditions of the lease prior to its execution.
Reprinted with permission from the June 23, 2010 edition of The Legal Intelligencer © 2010 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, contact 877-257-3382, reprints@alm.com or visit www.almreprints.com.
