In re Clark

96 B.R. 569 (Bankr. E.D. Pa. 1989)

 

RULE:

A lease is to be construed as a contract, and standard contract remedies are available to both landlord and tenant for a breach thereof. The standard measure of such damages is the "percentage reduction in use" method, i.e., the diminution in value of the leased premises by reason of the defects giving rise to the breach of the implied warranty of habitability. The tenant may also recover incidental or consequential damages resulting from the breach.

FACTS:

The matters before us are an epilogue to our Opinion of September 21, 1988, reported at 91 B.R. 324, granting certain former tenants of the Debtor-landlord, MILTON CLARK, SR., a portion of the relief which they sought against him in a prior adversary proceeding. At issue are proofs of claims filed by four of the tenant-plaintiffs (hereinafter referred to collectively as "the Claimants") in that proceeding, to which the Debtor has objected. The Claimants allege that the Debtor continuously breached the implied warranty of habitability regarding their premises and that they are entitled to recover retroactive rent abatements, compensatory damages for personal property lost or purchased as a result of the condition of the rented premises, and compensation for "deprivation and humiliation." The Claimants also seek to treble their damages by invocation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 P.S. § 201-1, et seq. 

ISSUE:

Are the claimants in this case entitled to a retroactive rent abatement from September, 1986, until the filing of the Debtor's bankruptcy petition?

ANSWER:

Yes.

CONCLUSION:

The court held here that those Claimants who paid rent during that period are entitled to a retroactive rent abatement from September, 1986, until the filing of the Debtor's bankruptcy petition. We also award that portion of damages sought for property lost or purchased as a result of the Debtor's breach of the implied warranty of habitability which we did not already award in our previous Opinion as compensation for the Debtor's contempt of our Orders in the adversary proceeding. However, the court declined to allow claims for rent abatements prior to September, 1986, because there is insufficient proof that the implied warranty of habitability had been breached prior to that date. Neither did the court award damages for any injuries incurred subsequent to the filing of the Debtor's bankruptcy petition, as these are post-petition claims. Given the nature of the habitability problems presented here, the court believes that the claimants are entitled to some compensation for "deprivation and humiliation," or discomfort. In addition, in light of the substantial and continuous nature of the habitability defects, the court finds that the claimants are entitled to treble damages under UDAP, but only as to certain of their claims. Specifically, the court limits recovery of treble damages to the Claimants' out-of-pocket expenses occasioned by the prolonged lack of heat and hot water in their units.

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