December 10, 2015
Was the California landlord to the terrorist couple entitled to open up the rental property to the news media? Internet videos show a frenzied swarm of camera crews exploring every cabinet and closet. So what if the San Bernardino landlord holds controversial open house? Commentators raised questions about preservation of evidence in the criminal investigation. There is also an ethics-in-journalism element. Given the heinousness of the crimes and public interest in foiling future attacks, it’s easy to overlook the landlord-tenant legal issues raised when tenants use a rental for criminal purposes and some die before termination of the lease. This story is of interest to any landlord with elderly tenants or who rents in a community with a crime problem.
According to law enforcement, Syed Farook and Tashfeen Malik used the garage of the Redlands, California townhouse they rented as a homemade explosive device factory. They used their residence as a base for their December 2nd attack on the Inland Regional Center that tragically left over 14 people dead and many more wounded. The victims and their families deserve our continued concerns and prayers, especially as public attention shifts elsewhere. As a new father, I cannot fathom Farook and Malik’s decision to drop off their six-month-old daughter with a relative and then commit such a deplorable attack. While Malik’s pledge of allegiance to the Islamic State of Iraq and Syria makes motive discernment easier, this blog post is about landlord-tenant law and not the politics-and-religion issues discussed thoroughly elsewhere. The deceased attackers were not the only residents of the property. Farook’s mother and the couple’s six month old baby also lived there. Law enforcement searched the premises and removed certain items of interest. According to news reports, they turned it back over to landlords Doyle & Judy Miller. On Friday, December 4, 2015, Doyle Miller held an informal press conference on the lawn of the townhouse. After the interview he opened up the house and permitted the news media and their cameras to search the house except for the garage.
Given the law enforcement’s interest in further investigations, the landlord’s interest in preventing additional notoriety to the property, the grandmother’s possessory interest in the place and the child’s unique vulnerability as a resident, heir, and orphan, it is shocking that the media obtained free access with their film crews. The reporters likely put their fingerprints all over the townhouse, moved items around, and possibly removed or destroyed parts of the townhouse or the occupants’ belongings. In fact, MSNBC later publicly apologized for broadcasting some photos and identification cards of some occupants. One can imagine the intense pressure the identification of the killers’ home must have placed on the Millers. They needed to cooperate with law enforcement. After the police search, the news media must have inquired about the inside of the house. The deceased’s shocking crimes do not conjure sympathy. One would not expect the grandmother and grandchild to ever live there again. It may have appeared easier to simply let the media swarm inside the house than to face their constant inquiries.
The Millers may have been concerned that refusal to cooperate with the media might lead to further questions about landlordly knowledge of the activities at the house. In an informal press conference held at the property, Doyle Miller stated that his tenants always paid their rent on time. The renters called a few times requesting landlord repairs. During his visits he never saw any guns or bombs. When asked if he ever went into the garage where law enforcement found evidence of pipe bomb manufacturing, he stated that once he went in there but he only saw some people repairing a car.
Good landlords check to make sure that prospective renters can pay their rent and won’t cause other problems. During the rental period, many obligations to maintain the property fall on the landlord. Most lease agreements provide for landlords to inspect the property for damage by the tenant or other causes during the rental period. Homemade bomb manufacturing is not just illegal. It is an ultra-hazardous activity involving explosive devices that can be easily set off. No landlord wants that in their townhouse no matter how timely the rent payments are.
Sometimes tenants engage in narcotics trade or other illegal activities. Tenants can be incarcerated or die. These are events that can lead to the termination of a tenancy. However, such events don’t necessarily cause the other occupants or the estate of the deceased to lose all of their rights in the premises or their belongings. In Virginia, like many places, a landlord cannot evict a residential tenant’s family without going through the courts. Hosting a media circus seems like a troublingly broad extension of a landlord’s right of inspection. Our legal system has many procedures in place to protect people from infringement of their rights to be secure in their own homes. News reports do not suggest that the townhouse or its contents were abandoned by the grandmother, infant, or the estate of the deceased. While the Millers must have been under a lot of pressure, it is not clear why they didn’t use California’s landlord-tenant laws and the provisions of the lease agreement to deal with the personal property and retake possession of the premises. The attorney’s fees would be a small price to pay for the value of the legal protection. Perhaps some of my readers may have some insights.
Landlords should not discriminate against prospective or current tenants based on their religion or national origin out of fear of renting to terrorists. I am not aware of any exception to anti-discrimination laws for instances where landlords associate a national origin or religion with types of illegal conduct. I’m wondering if any state legislatures will amend landlord-tenant, community associations, or mortgage statutes to give landlords, HOA’s, or lenders expanded legal privileges or duties to prevent homes from being used for terrorism. I’m concerned that homeowners’ rights are already under assault from different directions and such legislation would have unintended consequences.
Given the desire of the Farook family for privacy, I’m not sure if any legal claims will be brought against the Millers for hosting the media “open house.” The family may decide that any damages from loss of use of the townhouse or ownership of personal items is not worth the loss of privacy from media attention surrounding such a suit. However, given the high profile of this media event, the public may draw an incorrect inference that the Miller’s actions are advisable or without substantial risk. This is significant because home ownership is on the decline and renting is the trend. Many working people are unable to save a down payment necessary to purchase a home. In the event that tenants use a rental for illegal purposes and/or die before the leasehold is terminated, a landlord should consult with a qualified attorney before taking possession of the property. If occupants of rental properties are displaced by the criminal conduct of other tenants, they should also seek counseling to protect their rights.
December 1, 2015
Experienced trial lawyers know that judges disfavor parties using litigation as a means of inflicting extra punishment on their opponent beyond the outcome of the case. Lawyers and their clients are supposed to use claims, defenses, motions and other procedures for their intended purposes of working justice. Real estate and construction litigation is an emotional process. In real estate and construction cases, the property at issue represents the owner’s home, business or retirement. In the courthouse, there is a fine line between seeking justice or revenge. In a November 12, 2015 opinion, the Supreme Court of Virginia found that a real estate investor crossed the line into impermissible vindictiveness. The plaintiff sanctioned for intimidating lawsuit. The Supreme Court upheld an award of sanctions rendered by the Circuit Court of Albemarle County in the investor’s dispute with his ex-girlfriend. When a party is trying everything they can to resolve a dispute quickly and decisively, knowing where one might find the boundary into sanctionable territory is crucial. Even savvy people can find themselves in intractable litigation. This case opinion contains valuable insights for self-protection.
Mitchell Kambis was a real estate broker, home designer and developer who passed away at the age of 71 in October 2015. According to an informative article by Peter Veith in Virginia Lawyer’s Weekly, Kambis restored the historic Empire Theater in Richmond. His obituary states that he attended law school but does not indicate whether he graduated. Kambis was in a romantic relationship with April Considine for over 11 years. Kambis and Considine formed Villa Deste, LLC for developing 130 acres in Albemarle County. To finance the investment, the couple borrowed over $2 million from Considine’s mother. At some point, Kambis transferred all of his ownership interests in Villa Deste to Considine, making her the sole owner. After the couple broke up, Kambis brought a 19 claim Complaint against Considine and her mother over the real estate.
The parties engaged in substantial motions practice over whether the lawsuit brought by Kambis alleged facts sufficient to support the multitude of requests for damages and other remedies. Considine filed a motion for litigation sanctions arguing that the suit was not warranted by existing law and was simply to harass. The Albemarle County Circuit Court threw out some but not all of the claims in Kambis’ lawsuit. Kambis and his attorney overcame the initial obstacles and got their case scheduled for trial.
As frequently happens in intractable cases, the parties filed a multitude of pretrial motions. Brevity prohibits me from describing them all and how the Court ruled at each stage. The court opinion described a pattern whereby Kambis brought claims or motions, would drop them, and later bring them up again. 12 days before trial, Kambis’ lawyer succeeded in getting the court to allow him to withdraw from the case. A few days later, the now lawyer-less Kambis voluntarily dropped claims for battery and intentional infliction of emotional distress. The Court refused to allow Kambis to voluntarily dismiss his claim for fraud because of Considine’s counterclaim. At some point, Kambis asked for the trial to be postponed because his case was too complicated for him to handle without a lawyer.
Eventually, the Court awarded Considine sanctions in the amount of $64,319.38 against Kambis’s original lawyer. The Court also awarded $84,541.61 against Kambis personally, finding, “a certain level of intent to intimidate Ms. Considine in this particular case.” Kambis ran up the costs of the litigation, including attorney’s fees. The Court further held Kambis responsible for the “costs of the trial and going forward.”
The difference between litigation sanctions from an ordinary award of attorney’s fees is a frequent source of confusion. Generally speaking, parties are responsible for bearing their own costs of litigation, including attorney’s fees. The most common exception is where a contract between the parties provides for an award of attorney’s fees to a prevailing party. There are other exceptions that may arise out of statutes such as the Virginia Consumer Protection Act.
Virginia law distinguishes an award of attorney’s fees as a litigation sanction under Va. Code § 8.01-271.1 from prevailing party awards. This statute can provide for attorney’s fees regardless of the type of claim or defense brought and what the parties may have agreed to in writing. Courts in Virginia have strictly construed this statute, only applying it in extraordinary circumstances where its key provisions are met:
The signature of an attorney or party constitutes a certificate by him that (i) he has read the pleading, motion, or other paper, (ii) to the best of his knowledge, information and belief, formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and (iii) it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.
In expensive, unsettled disputes eventually one party has their legal arguments and factual presentation rejected. The question may arise whether their pursuit or defense of the case was sanctionable. Usually, no. Just because a party completely prevails over their adversary on a motion or at trial does not necessarily mean that there is grounds for sanctions. This exception does not swallow whole the general rule that parties bear their own costs in litigation.
Mitchell Kambis appealed the judge’s award of sanctions. He argued that his fraud claim was well-grounded in law and fact because it survived extensive pretrial motions. The Supreme Court of Virginia found that the trial court did not need to find Kambis’ claims legally inviable to conclude that they were for an “improper purpose.” This conceptual separation between the viability of claims or defenses and the propriety of a litigant’s purposes in bringing them is what may raise the blood pressure of many trial lawyers trying to walk the line between zealous advocacy and impermissible vindictiveness. Just because a party wins a motion on the sufficiency of a pleading doesn’t mean that claim is “immune” from a sanctions motion later on.
Kambis also argued on appeal that while his court action was intimidating, it was not for an improper purpose that would support an award of sanctions. The court observed that Kambis’ conduct, “demonstrated he was less interested in vindicating his legal rights and more interested in intimidating and injuring Considine.” Kambis forced Considine to expend a significant amount of time and money in motions practice and in trial preparation before Kambis dropped many of them right before trial.
The court’s award of sanctions was supported by emails and oral courtroom admissions that the lawsuit was designed to intimidate and that if the suit failed, the motion for sanctions had a reasonable likelihood of being granted.
Confusingly, an award of sanctions is not warranted just because a party finds the litigation process intimidating. To start, the act of filing of public documents alleging wrongdoing is intimidating. What’s more, at the center of any trial, the credibility of a party’s testimony is tested by right of cross-examination. Cross-examination is so intimidating that a law of evidence developed to protect the integrity of this process. Justice Cleo Powell recognized this issue in the Kambis case:
We recognize that almost any legal action is, in some way, intimidating. Such intimidation is inherent in our adversarial legal system and is generally not sanctionable, so long as the intimidation is a collateral effect of a party’s legitimate attempt to vindicate a legal right. The spectre of sanctions arises when intimidation is no longer a collateral effect. Thus, where a party brings an action or makes a filing primarily to intimidate the opposing party, such an action or filing is improper and runs afoul of Code § 8.01-271.1.
Kambis v. Considine clarifies that just because a lawsuit survives initial attempts to dislodge it on motions, it may not necessarily later survive a motions for sanctions. A casual reading of the Kambis opinion might lead some trial lawyers to argue that where a vindictive or intimidating motive can be ascribed to an opponent’s actions, then an award of attorney’s fees are proper. If this was a correct interpretation of this opinion and the statute, then it would increase unnecessary litigation rather than cut it out. Parties’ decisions to bring or defend legal proceedings never occur in a vacuum. Parties and their lawyers would seek sanctions every time their opponent filed anything because an ulterior motive could be intimated from the context of the case. Such an argument would ignore the extraordinary facts in the Kambis case, together with the admissions made regarding Kambis and his lawyer in email and in open court.
It is difficult to end cases like Kambis v. Considine before trial because the credibility of witnesses in a fraud case is not proper for determination on a motion for summary judgment in the Virginia court system. The Supreme Court seems to be saying that while a litigant may have a right to prove their version of the facts at trial, the sanctions statute prohibits them from abusing their right to a trial.
Resentment can fool otherwise sensible people into thinking that they are seeking justice when really they want payback. This is why it is important for a party to retain a lawyer who will exercise independent professional judgment. This protects both the lawyer and the client from making shortsighted litigation decisions that are antithetical to their long term best interests. This is especially important in real estate and construction cases where so much is at stake.