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BED BUG PRESENTATION

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Title: BED BUG PRESENTATION

1
BED BUG PRESENTATION

BY Jeffrey M. Lipman

2
DOCUMENT YOUR ADVICE

Pest control operators are at risk of being
named in a lawsuit. It is extremely important to
document your action plan and alternatives in
writing.

3
FOLLOW THE ACTION PLAN

Hotel/Motel and apartment managers will be named
in most lawsuits. Extremely important to follow
the action plan and document compliance
Written action plan approved by pest control
provider
Written engagement contract specifying bedbug
eradication management

Have pest control company provide requirements
for treatment readiness
Make sure tenants are prepared for treatments
Have written post treatment follow up plan.

5
LANDLORD AND HOTEL'S DUTY TO TENANTS GUESTS

1. Provide a habitable premises
2. Protect from clear present danger

6
CLEAR PRESENT DANGER

Conduct which presents an immediate and serious
danger to the safety of other tenants or the
landlord.

7
LANDLORD OR HOTEL MUST ACT

1. Warn guests of danger (bedbugs)
2. Evict tenants who interfere with bedbug
eradication.
3. Assist tenants who are mobility impaired with
preparation for treatment.

8
ONGOING DUTY TO INVESTIGATE

1. Bedbug monitors.
2. Periodic inspections as recommended by pest
control operator.

9
PREMISES LIABILITY

Courts have adopted a seven (7) factor
multifactor formula for analyzing premises
liability actions
(1) The foreseeability of possibility of harm
(2) The purpose for which the entrant entered the
premises
(3) The time, manner, and circumstances under
which the entrant entered the premises
(4) The use to which the premises are put and
expected to be put

(5) The reasonableness of the inspection, repair,
or warning
(6) The opportunity and ease or repair or
correction or giving of the warning
(7) The burden on the land occupier and/or
community in terms of inconvenience or cost in
providing adequate protection.

11
IMPLIED WARRANTY OF HABITABILITY

An implied warranty of habitability is a warranty
implied by law that by leasing a residential
property, the lessor is promising that it is
suitable to be lived in and will remain so for
the duration of the lease.

12
CASE LAW

Courts have recognized the obligation of a
landlord to provide his tenant with premises
suitable for habitation. Under this doctrine,
the landlord "impliedly warrants at the outset of
the lease that there are no latent defects in
facilities and utilities vital to the use of the
premises for residential purposes."

13
WHEN LIABILITY ARISES

A landlord "is only liable for injuries resulting
from a hidden or latent defect if the landlord
knew or should have known of the defect."
Implicit in this standard is the rule that a
landlord must, on some occasions, make reasonable
inspections to search for latent defects.

14
LANDLORD'S OBLIGATION

The landlord's obligation is only to do what is
reasonable under the circumstances. The landlord
need not take extraordinary measures or make
unreasonable expenditures of time and money in
trying to discover hazards unless circumstances
so warrant.

Where there is a potential serious danger which
is foreseeable, a landlord should anticipate the
danger and conduct a reasonable inspection before
passing possession to the tenant. However, if no
such inspection is warranted, the landlord has no
such obligation.

16
REASONABLE INSPECTION
"Under this standard, the landlord has a duty to
conduct a reasonable inspection before passing
possession to a tenant when there is potential
serious danger, which is foreseeable." In this
context, the trigger of the duty to perform an
inspection is the foresee ability of a latent
defect that could lead to serious danger.
17
UNFAIR DECEPTIVE ACTS PRACTICES

Rental units may not contain illegal hazards that
endanger the occupants well-being or that make
the unit unfit for habitation. A landlord who
rents out an apartment impliedly represents that
it is in compliance with the applicable health
and safety codes. If it is not, the landlord has
committed a UDAP violation.

18
Collection of the full amount of rent while the
unit is in violation of the housing code or where
the unit had material defects rendering it unsafe
or unfit is a UDAP violation.
19
Spaulding v. Young, 32 Mass. App. Ct. 624, 592
N.E.2d 1348 (1992)

Landlord is liable under UDAP statute if
conditions seriously or materially impair the
health or safety and well being of an occupant,
whether or not the conditions violate the
Sanitary or Housing Code.

20
Pierce v. Reichard, 593 S.E. 2d 787 (N.C. Ct.
App. 2004)

Landlord is liable for UDAP violation and treble
damages for failing, despite tenants complaints,
to repair premises for leaky roof.

21
Unfair to collect rent on an apartment containing
numerous defects making it unfit and
uninhabitable, where the landlord had notice of
those defects and did not correct them.
22
EXAMPLE

Massachusetts highest court has affirmed a
61,475 treble damages judgment against a
landlord who rented an uninhabitable apartment to
a tenant, refused to repair it, and was abusive
and threatening to the tenant. Haddad v.
Gonzalez, 410 Mass. 855, 576 N.E.2d 658 (1991).

23
EXAMPLE 2

Grundberg v. Gill, 56 Mass. App. Ct. 1116, 780
N.E.2d 158 (Mass. App. Ct. 2002) (unpublished)
Affirming UDAP treble damages where landlord knew
or should have known that failure to correct
septic system would result in a severe emotional
distress and breach of warranty.

24
UDAP MEASURE OF DAMAGES

A North Carolina court holds that the measure of
damages for substandard housing conditions is the
difference between the fair rental value of the
property in the warranted condition and its
actual fair rental value, but damages can not
exceed the total amount of rent paid by the
tenant. Cardwell v. Henry, 549 S.E.2d 587 (N.C.
App. 2001

25
A landlords continuous and systematic breach of
the implied warranty of habitability has been
found to be unfair. Although not every breach of
warranty would be a violation, either an
egregious or a continuous one would be, as where
the landlord continuously failed to remedy
defects despite notices and judicial proceedings.

26
Substantial and material breach of implied
warranty of habitability is a UDAP violation,
even if negligent.
27
DUTY TO DISCLOSE

The landlord must disclose all violations of law
in the unit, and must correct or pay to correct
all such violations.

28
EXAMPLE

Underwood v. Risman, 414 Mass. 96, 605 N.E.2d 832
(1993)
Landlord is responsible only for disclosing
hazards of which he has actual knowledge. Even
if a landlord rents a unit not knowing about
serious housing violations, it is unconscionable
for the landlord to fail to remedy the
violations.

29
RATIONALE

The tenant is in an untenable position of having
to move out or live with substandard conditions.
Clearly, the UDAP statute was designed to afford
Plaintiffs the ability to pursue claims against
landlords who withhold vital information about
the health and safety of their leased units.

30
UNJUST ENRICHMENT

The doctrine of unjust enrichment is based on the
principle that a party should not be unjustly
enriched at the expense of another or receive
property of benefits without paying just
compensation. Although it is referred to as a
quasi-contract theory, the doctrine of unjust
enrichment is equitable, not contractual, in
nature. The doctrine of unjust enrichment serves
as a ground for the remedy of restitution.

31
ELEMENTS

One asserting a claim of unjust enrichment must
establish three propositions
(1) defendant was enriched by receipt of a
benefit,
(2) the enrichment was at the expense of the
plaintiff, and
(3) it is unjust to allow the defendant to retain
the benefit under the circumstances.

32
PUNITIVE DAMAGES CASE

The leading bedbug case discussing punitive
damages is Mathias v. Accor, 347 F.3d 672 (7th
Cir. 2003) In Mathias, Judge Posner, writing for
the Seventh Circuit, reviewed a diversity case
brought in federal court against Motel 6 in
downtown Chicago where residents of the hotel
were bitten by bedbugs. A jury awarded the 2
Plaintiffs each 5,000 in compensatory damages
and 186,000 in punitive damages.

33
HOTELS ARGUMENT

The hotel argued that it was, at best, negligent
and that an award exceeding 20,000 would be
excessive.

34
JUDGE POSNERS THOUGHTS

Judge Posner ruled that "evidence of gross
negligence, indeed of recklessness in the strong
sense of an unjustifiable failure to avoid a
known risk was amply shown." Id at 674.

35
FACTORS RELIED UPON

(1) Discovery of the bedbugs
(2) Failed attempts at spraying the rooms to
exterminate the bedbugs
(3) Warnings by an exterminator that the
building needed to be closed while every room was
sprayed and refusal of the hotel to comply and

(4) Knowledge of a management-level employee of
the defendant of the risk and failure to take
effective steps to wither eliminate it or to warn
guests ("which are imputed to his employer for
the purpose of determining whether the employer
should be liable for punitive damages")

In Mathias, Judge Posner pointed out that the
infestation continued and began to reach farcical
proportions. After pointing out, odd that at
that point Management didn't flee the motel.

Judge Posner discussed that the hotel
acknowledged to the exterminator that there was a
"major problem with bed bugs" and that all that
was being done about it was "chasing them from
room to room."

The court understood that although bedbugs bites
are not as serious as bites from other insects,
they are painful and unsightly. Motel 6 could
not have rented any rooms at the prices it
charged had it informed guests that the risk of
being bitten by bedbugs was appreciated. Its
failure either to warn guests or to take
effective measures to eliminate the bedbugs
amounted to fraud and probably battery as well.
. .

40
RELIANCE NOT REQUIRED (Most of the time)

Generally, courts are more receptive to consumer
fraud class actions than common law fraud class
actions in view of relaxed reliance and causation
requirements.

41
Reliance on the prohibited practice or act is not
required. In fact, recovery is permissible even
if the plaintiff should have discovered the fraud
or otherwise should have known of it.
42
FRAUD NEED NOT BE CONVEYED TO PLAINTIFF

Further, the misrepresentation need not be made
directly to the plaintiff. Raudebaugh v. Action
Pest Control, Inc., 650 P.2d 1006, 1009 (Or.
1982) (termite inspector falsely claimed to the
homeowner that the house was free of insect
infestation, later buyer relied on that statement
could sue the termite inspector under statute.)
Warren v. MeMay, 491 N.E.2d 464, 474 (Ill. App.
Ct. 1986).

43
RELIANCE IN OTHER STATES

States that do have reliance elements emphasize
that reliance may be wholly unreasonable and
refer to the effect on the "unsophisticated
consumer" when determining whether or not an act
or practice is deceptive. Murphy v. McNamara, 416
A.2d 170 (Comm. Super. 1979) (statute must be
applied to protect the unsuspecting and the
credulous as well as the sophisticated.)

44
MAJORITY APPROACH - DAMAGES

The majority approach under most state consumer
law statutes is "benefit of the bargain", value
of product/services as represented less value as
delivered, which is more favorable to the
consumer than "out of pocket" approach.

45
COMPENSATORY DAMAGES INCLUDE

All compensatory damages presumably include
consequential and incidental damages, including
repair costs and lost profits, where foreseeable
and otherwise recoverable under damages rules.
see e.g., Hyder-Ingram Chevrolet, Inc.v. Kutach,
612 S.W.2d 687 (Tex. App. 1981)

46
LIABILITY STEMS FROM UNCERTAINTY