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Stikeleather Realty & Investments Co. v. Broadway

Court of Appeals of North Carolina

May 19, 2015

STIKELEATHER REALTY & INVESTMENTS CO., Plaintiff-Appellant,
v.
ELISHA BROADWAY, Defendant-Appellee

Heard in the Court of Appeals 18 March 2015.

Page 108

Law Offices of James W. Surane, PLLC, by Ross S. Sohm, for plaintiff-appellant.

No brief filed on behalf of defendant-appellee.

Robert N. Hunter, JR., Judge. Judges STEPHENS and TYSON concur.

OPINION

Page 109

Appeal by plaintiff from judgment entered 18 July 2014 by Judge Matt Osman in Mecklenburg County District Court, No. 14-CVD-9222.

HUNTER, JR., Robert N., Judge.

Stikeleather Realty & Investments Co. (" Plaintiff-Landlord" ) appeals from a bench trial judgment awarding trebled rent abatement and attorney's fees to Elisha Broadway (" Defendant-Tenant" ) on claims of breach of the implied warranty of habitability and unfair and deceptive trade practices. We reverse.

I. Factual & Procedural History

On 19 March 2014, Plaintiff-Landlord initiated a summary ejectment action against Defendant-Tenant for breach of a residential lease agreement for failure to pay rent for the month of March. On 31 March 2014, Defendant-Tenant filed an answer and asserted the defense of retaliatory eviction pursuant to N.C. Gen. Stat. § 42-37.1, as well as counterclaims for (1) breach of the implied warranty of habitability pursuant to N.C. Gen. Stat. § 42-42, (2) unfair and deceptive trade practices pursuant to N.C. Gen. Stat. § 75-1.1 et seq., (3) unfair debt collection practices pursuant to N.C. Gen. Stat. § 75-50 et seq., (4) negligence, and (5) negligence per se.

On 22 April 2014, Plaintiff-Landlord filed an amended complaint, alleging Defendant-Tenant also breached the lease by keeping an unauthorized pet. On 2 May 2014, Defendant-Tenant filed an amended answer and counterclaim, which contained no substantive changes pertinent to this appeal. On 8 May 2014, the magistrate entered judgment in favor of Plaintiff-Landlord on the primary claim of possession and in favor of Defendant-Tenant on his counterclaim of breach of the implied warranty of habitability only, awarding him $1,000.00 in damages. Plaintiff appealed to the district court.

On 30 June 2014, the case was heard in Mecklenburg County District Court before the Honorable Matt Osman. At that time, Defendant-Tenant had already surrendered possession of the property. Therefore, the sole issue before the trial judge was Defendant-Tenant's counterclaim for breach of the implied warranty of habitability. The transcript of this bench trial, as well as the record on appeal, reveals the following pertinent facts.

In May 2010, Defendant-Tenant entered into a residential lease to rent a home located at 2600 Catalina Avenue in Charlotte (" the property" ) for $500 per month. At this time, the property was neither owned nor managed by Plaintiff-Landlord. The lease contained a page signed by Defendant-Tenant stating that a " Carbon/Smoke Detector" [1] existed in the home and that it was in good working condition when Defendant-Tenant took possession of the property. The lease also provided that Defendant-Tenant shall make requests for repairs in writing.

On 4 June

Page 110

2013, Mr. Kluth, a real estate broker, visited the property to obtain general information to list the house. On 10 June 2013, Mr. Kluth returned to the property for another inspection, this time bringing an interested buyer, Mr. Stikeleather, managing partner of Plaintiff-Landlord, a limited liability corporation in the business of buying and selling residential properties.

During this second pre-sale inspection, Mr. Stikeleather asked Defendant-Tenant if the property had a smoke alarm and carbon monoxide alarm. Defendant-Tenant responded that it did not. Mr. Kluth then went to his truck and returned with a smoke alarm and carbon monoxide alarm for Defendant-Tenant to put in the property.

On or around 26 June 2013, Plaintiff-Landlord purchased the property and sent a letter to Defendant-Tenant notifying him that Plaintiff-Landlord was the new owner and property manager. The letter also directed Defendant-Tenant to call Plaintiff-Landlord to set up an inspection of the property and to put any requests for repairs in writing.

On or around 24 September 2013, Mr. Stikeleather went by the house to do an inspection, but it had to be " quick" because of the presence of an unauthorized pet on the premises. During this inspection, Mr. Stikeleather testified that he observed an alarm in the living room, plugged into an electrical outlet in the wall, but he admitted he did not verify whether it was working properly.

Near the middle of March 2014, Defendant-Tenant called Mr. Stikeleather and told him he would be late with March's rent; Mr. Stikeleather responded that he would file eviction papers, which he did on 19 March 2014. Two days after the parties appeared in small claims court near the end of March 2014, Plaintiff-Landlord sent his repairman to install a smoke alarm and carbon monoxide alarm in the premises. Defendant-Tenant felt it was unfair to be evicted for being only a few days late on rent, so he went to City Code Enforcement, which issued an inspection report that does not mention any issue with the property's smoke alarm and carbon monoxide alarm. Defendant-Tenant did not pay rent for the months of March, April, or May 2014.

The day after the bench trial, on 1 July 2014, the trial judge entered a judgment containing the following pertinent findings of fact, whose order has been reorganized by this Court in an effort to improve clarity:

3. [Defendant-Tenant] lived at 2600 Catalina, Charlotte, NC (" the property" ), for four years and three months.
. . . .
43. [Defendant-Tenant's] son, Ronald Broadway (RB), lived with his father at the property.
. . . .
4. At the time [Defendant-Tenant] took possession of the property in 2010 it was owned and managed by a different landlord than the Plaintiff in this action.
. . . .
65. [Mr.] Stikeleather is the managing partner of the LLC that is [Plaintiff-Landlord].
. . . .
76. [Plaintiff-Landlord's] LLC owns approximately 200 properties and manages another 300 properties.
. . . .
55. Mike Kluth is a real estate broker in Charlotte and he sold the property to [Plaintiff-Landlord].
56. Prior to selling the house, Mr. Kluth visited the property in June 2013 to obtain general information to list the house.
. . . .
58. During a second pre-sale inspection of the property in June 2013, [Defendant-Tenant] told Mr. Kluth and [Mr. Stikeleather] about the flooding in the basement. The basement was dry when Mr. Kluth and [Mr. Stikeleather] saw it.
59. During the second inspection [Mr. Stikeleather] asked [Defendant-Tenant] about a Smoke/Carbon detector. [Defendant-Tenant] said there was not one present in the property.
60. Mr. Kluth then went to his car and got a Smoke/Carbon detector to ...

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