Property owners and property managers have a responsibility to make sure their site is safe for lawful guests. This duty includes residential landlords, who have many responsibilities to their tenants and tenant guests, including ensuring they are safe from an unreasonable risk of harm.
This could include things like:
- Broken stairways
- Unlit parking lots
- Lack of security/ locks on the doors
- Not having working smoke detectors
A recent case of Lompe v. Sunridge Partners before the U.S. Court of Appeals for the Tenth Circuit shows how landlords and property management companies can be liable for failing to make sure their properties are in safe condition. In this situation, it was a broken HVAC system that was the source of serious injury for a young college student.
According to court records, 20-year-old plaintiff moved into a Wyoming apartment complex in September 2010.
There were 96 units, owned by a Southern California couple who considered themselves “passive real estate investors.” That is, they purchased property and then hired another company to manage it. When the owners purchased the property in 2007, they were informed the HVAC system was in satisfactory condition, but needed some short-term and immediate condition due to normal wear and aging of the systems. The report didn’t indicate the furnaces needed to be immediately replaced, but the property owner did set aside $154,000 to replace the systems over the course of the next five years.
The couple hired a property management firm to oversee day-to-day operations, and the agreement was any purchase over $1,000 had to be cleared by the couple, unless it was an emergency. Records show there is no direct evidence the property management firm notified the owners of any carbon monoxide-related incidents.
The property management had an employee living on site, though neither he nor the maintenance worker had been trained on furnace maintenance – though the maintenance worker had requested such training. Anytime a new tenant moved out or in (or else once annually) the property manger would replace the filter, but did not inspect the furnace to check for safety or functionality.
Plus, it was only later discovered that only half the units had working carbon monoxide detectors, though there had reportedly been several issues with carbon monoxide on site. In October 2009, for example, an employee had to be transported to the hospital for carbon monoxide poisoning after exposure at the club house. There were a total of three carbon monoxide incidents in the months prior to this incident, but still the furnaces were not replaced and the property owners not informed.
In February 2011, a few months after plaintiff moved in, an employee for the property manager (the same worker who had previously suffered CO poisoning) went into the building to deliver paperwork to another tenant when he smelled an odor reminiscent of a smell he encountered during his own exposure. He called the gas company and a technician responded, reporting high levels of CO on the floor. The worker and technician immediately removed plaintiff (who was unconscious) from her apartment and evacuated the rest of the building.
Plaintiff’s unit did not have a working CO detector.
Plaintiff survived, but suffered brain damage with continuing neurological deficiencies.
She sued both the property manager and property owner seeking compensation for her personal injuries. Jurors found both defendants liable and awarded plaintiff a total of $3 million in compensatory damages and $22.5 million in punitive damages. A total of $3 million was apportioned to property owners and the rest against property managers.
Defendants appealed, arguing jury instructions were erroneous as to punitive damages and the amount of punitive damages was excessive.
Upon review by the Tenth Circuit Court of Appeal, the court held evidence was insufficient to justify punitive damages against the property owners and the punitive damage award against property management was grossly excessive, and it was reduced to $1.95 million. That means in total, plaintiff will receive approximately $5 million.
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Lompe v. Sunridge Partners , April 1, 2016, U.S. Court of Appeals for the Tenth Circuit
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