Landeros v. Pankey

In Landeros v. Pankey (1995) 39 Cal.App.4th 1167, the Landeroses were former tenants of the Pankeys. In 1992, the Pankeys filed an unlawful detainer action against the Landeroses; in addition to possession of the premises, the Pankeys sought damages of $ 900, representing two months of back rent. The Landeroses' answer to the Pankeys' complaint raised the affirmative defense that Pankey had breached an implied warranty of habitability. The action was settled by a "stipulation for judgment" on a municipal court form, pursuant to which the Pankeys received $ 300 and possession of the premises. "The stipulation for judgment contained no specific or general language concerning the dispute over the habitability of the property during the three-year period the Landeroses lived in it, nor any comprehensive language typically employed to indicate a settlement of any and all issues in dispute." ( Landeros, supra, 39 Cal.App.4th at pp. 1170-1171.) Some time later, the Landeroses filed a new action, seeking damages for breach of the warranty of habitability during the three-year period in which they were the Pankeys' tenants. The trial court sustained a demurrer to the complaint without leave to amend, based on the Pankeys' assertion that it was barred by principles of collateral estoppel. The Court of Appeal reversed. ( Id. at pp. 1169-1170.) The Court of Appeal rested its conclusion on the language used in the stipulated judgment and the fact that the claims raised by the Landeroses in the later action could not have been advanced in the unlawful detainer proceedings. First, the court found no "express language" in the stipulated settlement agreement, manifesting the parties' intention that the Landeroses be prohibited from filing a separate action for damages covering the three-year period during which the premises were allegedly uninhabitable. Second, the court noted that, under the special procedures applicable to unlawful detainer actions, the Landeroses were precluded from raising the issue of lack of habitability for the entire three-year period in those proceedings by affirmative defense or by cross-complaint for affirmative relief; they could only assert a lack of habitability as an affirmative defense for the two-month period covered by the unlawful detainer action. Because the Landeroses could not have advanced their long-term uninhabitability claims in the unlawful detainer action and because the stipulated judgment in that action did not manifest the intent that they not pursue such claims in the future, the Court of Appeal reversed. ( Id. at pp. 1171-1174.) In that case, the Court was presented with a case that "illustrates that settling an unlawful detainer action does not necessarily settle all disputes arising from a residential landlord-tenant relationship and that, in order to assure finality of litigation, the settlement documents must be comprehensive." There, the tenants entered into a stipulated judgment in an unlawful detainer action with the landlords to vacate the property. Eight months after the judgment, the tenants sued the landlords for damages for breach of warranty of habitability, alleging vermin infestations, a leaking roof, exposed wiring, and nonworking plumbing. (Id. at pp. 1169-1170.) A demurrer was sustained against the tenant's complaint on the ground of collateral estoppel; the landlords successfully argued the tenant's action was barred by the prior unlawful detainer judgment because warranty of habitability was raised as an affirmative defense in the prior action. (Ibid.) Because there was no evidence that the issue of habitability was litigated and determined and the stipulated judgment contained no language of comprehensive settlement of all matters between the parties arising from the lease, the tenants were not collaterally estopped from bringing their action. (Id. at p. 1174.) In short, the landlord and tenants had resolved an ordinary unlawful detainer action by way of stipulated judgment, and the plaintiffs later sued for damages for breach of the warranty of habitability. The court found the unlawful detainer for nonpayment of two months' rent did not dispose of the tenants' claim that the landlord breached the warranty of habitability throughout the entire three-year tenancy. The plaintiff tenants brought an action against their former landlords for breach of warranty of habitability. The landlords had previously brought an unlawful detainer action against the tenants, which resulted in a stipulated judgment with the tenants vacating the premises. The trial court sustained the landlords' demurrer on collateral estoppel grounds, because the warranty of habitability was raised by the tenants as an affirmative defense in their answer to the unlawful detainer action. (Landeros, supra, 39 Cal.App.4th 1167, 1169-1171.) The appellate court reversed, finding the former judgment, arrived at by stipulation with no issues actually litigated, did not preclude the tenants' action because the stipulated judgment contained no express language showing the parties intended to preclude the tenants from litigating damages resulting from their tenancy. The court also noted there was no comprehensive settlement language or any release of all claims arising from the tenants' occupation of the premises. (Landeros, supra, 39 Cal.App.4th at p. 1172.)