Marc P. MISHKIN, Petitioner, v. Dean YOUNG, Respondent.
No. 03SC848.
Supreme Court of Colorado, En Banc.
Feb. 28, 2005.
107 P.3d 393
Even with reference to the statute‘s legislative history, I fail to understand how the majority can disregard the plain language of
In conclusion, finding the statutory language clear and unambiguous, I would apply
I am authorized to say Chief Justice MULLARKEY and Justice BENDER join in the dissent.
Dean D. Young, Pro Se, Denver, for Respondent.
Colorado Legal Services, Manuel A. Ramos, David Bye, Jenifer Knight, Denver, Amicus Curiae for Colorado Legal Services.
Student Legal Services, Colorado State University, Kevin Daley, Kimi Jackson, Fort Collins, Amicus Curiae for Student Legal Services, Colorado State University.
University of Colorado Student Legal Services, Ned Jaeckle, Boulder, Amicus Curiae for University of Colorado Student Legal Services.
In this landlord-tenant action, we consider whether
I. Facts and Proceedings Below
The relevant facts are not in dispute. On February 1, 1999, Marc Mishkin (landlord) and Dean Young (tenant) entered into a written residential lease agreement. By the terms of the lease, the tenant paid a total security deposit of $1,625.00 which was to be returned within forty-five days after the tenant surrendered the premises.
On August 3, 2001, the tenant vacated the property. During the course of the next forty-five days, the landlord neither returned the security deposit nor accounted for its retention. On September 20, 2001, forty-eight days after surrendering the premises, the tenant sent the landlord a demand notice for return of the security deposit pursuant to
The tenant filed suit in the county court seeking return of the security deposit and treble damages pursuant to
The tenant appealed and the district court reversed. The district court held that a landlord must either return a security deposit or provide an accounting for why the deposit had been retained prior to expiration of the statutory deadline set forth in
In its endeavor to determine whether treble damages were warranted, the district court agreed with the county court that the landlord willfully retained the security deposit by failing to repay it within the seven-day period. However, unlike the county court, the district court determined that the landlord‘s retention was wrongful because he neither returned the security deposit nor accounted for its retention within the forty-five day retention period. Thus, where the coun-
The question raised on review is whether a landlord may avoid treble damages by accounting for the retention of a security deposit within seven days after a tenant serves a demand notice.1 The tenant argues that the Act clearly and unambiguously denies a landlord a second opportunity to make such an accounting. He argues that pursuant to
The landlord disagrees. The landlord does not dispute that
II. Analysis
Our analysis begins with the Act itself. We review the proper construction of statutes de novo. Lobato v. Industrial Claim Appeals Office, 105 P.3d 220, 223 (Colo.2005). In construing a statute, our goal is to determine and give effect to the intent of the legislature and adopt the statutory construction that best effectuates the purposes of the legislative scheme. People v. Yascavage, 101 P.3d 1090, 1093 (Colo.2004). To reasonably effectuate the legislative intent, a statute must be read and considered as a whole and should be interpreted so as to give consistent, harmonious, and sensible effect to all its parts. State v. Nieto, 993 P.2d 493, 501 (Colo.2000). “We read words and phrases in context and construe them literally according to common usage unless they have acquired a technical meaning by legislative definition.” Yascavage, 101 P.3d at 1093;
With these principles in mind, we turn to
(1) A landlord shall, within one month after the termination of a lease or surrender and acceptance of the premises, whichever occurs last, return to the tenant the full security deposit deposited with the landlord by the tenant, unless the lease agreement specifies a longer period of time, but not to exceed sixty days. . . . In the event that actual cause exists for retaining any portion of the security deposit, the landlord shall provide the tenant with a written statement listing the exact reasons for the retention of any portion of the security deposit. When the statement is delivered, it shall be accompanied by payment of the difference between any sum deposited and the amount retained. . . .
Subsection (2) of the Act declares that a landlord‘s failure to comply with subsection (1) works a forfeiture of all the landlord‘s rights to withhold any portion of the security deposit:
(2) The failure of a landlord to provide a written statement within the required time specified in subsection (1) of this section shall work a forfeiture of all his rights to withhold any portion of the security deposit under this section.
Upon forfeiture of the landlord‘s rights to withhold any portion of the security deposit, subsection (3)(a) authorizes a tenant to seek treble damages against a landlord after serving a seven-day demand notice:
(3)(a) The willful retention of a security deposit in violation of this section shall render a landlord liable for treble the amount of that portion of the security deposit wrongfully withheld from the tenant, together with reasonable attorneys’ fees and court costs; except that the tenant has the obligation to give notice to the landlord of his intention to file legal proceedings a minimum of seven days prior to filing said action.
According to the county court, the landlord did not wrongfully withhold the security deposit because the property was in fact damaged. We do not agree. The concept of wrongfulness, introduced in subsection (3)(a), refers to a landlord‘s failure to provide a written statement accounting for its retention during the initial period of the
We have previously reviewed these provisions, and as evidenced by our cases, a landlord cannot avoid treble damages by accounting for a security deposit, or some portion of it, after the statutory deadline of subsection (1) has passed. It is also evident from our cases that the purpose of the seven-day period following a tenant‘s demand notice is to give landlords one last opportunity to avoid treble damages only by returning the entire security deposit. It follows then, that an accounting made during the seven-day period would not permit a landlord to avoid treble damages because the seven-day period is necessarily beyond the statutory deadline of subsection (1).
For example, in Turner, we explicitly stated that the purpose of the seven-day notice period created by subsection (3)(a) was to give landlords “one last week to return the security deposit.” 189 Colo. at 237, 539 P.2d at 1243. In Turner, we affirmed an award of treble damages because the landlord accounted for the security deposit twenty days after the statutory deadline of subsection (1), thereby making the accounting “20 days too late.” Id. Thus, Turner implied that an accounting made during the seven days following a tenant‘s demand notice would not shield a landlord from treble damages.
Subsequent to our decision in Turner, we revisited subsection (3)(a) in Guzman, 194 Colo. at 161-62, 570 P.2d at 533. In Guzman, we determined that a landlord who accounts for a security deposit within thirty days of a tenant‘s surrender of the premises is not subject to treble damages in the absence of bad faith. Id. Because the landlords accounted for the security deposit within the statutory period established by subsection (1), it was implicit in Guzman that an accounting made after this period would not protect a landlord from treble damages.
In Martinez v. Steinbaum, 623 P.2d 49 (Colo.1981), it was again implicit that a landlord may not avoid treble damages by accounting for a security deposit within the seven-day period. In Martinez, we directed the district court to award treble damages after a landlord forfeited his right to retain a security deposit by never accounting for its retention. Id. at 55. Our reasoning simply proceeded through each provision of the Act. Pursuant to subsection (1), “before a landlord can retain a tenant‘s security deposit, he must provide the tenant with a written statement listing the exact reasons for the retention of any portion of that deposit.” Id. at 54 (internal quotations omitted). The landlord‘s failure to provide such a statement worked a forfeiture of all the landlord‘s rights to withhold any portion of the security deposit under subsection (2). Id. It is the failure to provide a tenant with the written statement statutorily mandated by subsection (1), giving the reasons for the failure to return the deposit, that make the withholding of a deposit wrongful. Id. at 54 (citing Heatherridge Mgmt. Co. v. Benson, 192 Colo. 190, 558 P.2d 435 (1977)). We concluded that pursuant to subsection (3)(a), the tenants were entitled to treble damages for the amount of the forfeited security deposit. Id.
These cases implicitly indicate that a landlord‘s failure to account for a security deposit as required by subsection (1) constitutes a forfeiture of all rights to withhold any portion of the deposit and subjects the landlord to treble damages. A landlord may avoid treble damages only by returning the entire security deposit during the seven days following a tenant‘s demand notice. An accounting during this seven-day period does not protect a landlord from treble damages because this period is beyond the statutory deadline of subsection (1) and the landlord has already forfeited all rights to retain the deposit. The purpose of the seven-day notice provision in subsection (3)(a) is to give landlords one last week to avoid treble damages by returning the security deposit. It does not give landlords a second chance to account for the deposit. “The money actually belongs to the tenant; it was only security for the landlord, who has by unilateral action forfeited all right to retain any of it.” Turner, 189 Colo. at 237, 539 P.2d at 1243. Therefore, we now make explicit what has been implicit in our prior rulings: We hold that a landlord may not avoid treble damages by accounting for a security deposit during the seven-day period following a tenant‘s demand notice.
Contrary to the landlord‘s contention, our interpretation does not render the remaining provisions of the Act meaningless. Subsection (2) performs a critical function by encouraging most landlords to expeditiously account for their tenants’ security deposits. Yet the case may arise where a landlord finds forfeiture an insufficient inducement to account for the withholding of a tenant‘s security deposit. In such situations, the prospect of treble damages provided for by subsection (3)(a) proves instrumental. Not only do treble damages act as a formidable deterrent to landlords who might otherwise wrongfully withhold a tenant‘s security deposit, but they also give tenants an enticing legal remedy where the alternative is to forgo a relatively small but often vital sum of money. The irony of the landlord‘s contention is that had the General Assembly intended to permit a landlord to account for a deposit after the statutory deadline of subsection (1), not only would subsection (2) be rendered meaningless because there could be no forfeiture, but the time requirements in subsection (1) would serve no purpose. Were we to adopt such a construction, a landlord could ignore subsection (1) entirely without repercussion. We reject this contention.
The purpose of the Act is to ensure the timely and equitable disposition of security deposits. See
By the terms of the lease agreement, the landlord here was required to either return the security deposit or account for its retention within forty-five days after the tenant‘s surrender of the premises. The landlord failed to satisfy this requirement. Instead, after receiving the tenant‘s notice of intent to seek treble damages, the landlord sent the tenant a written statement accounting for most of the deposit together with a check for the balance of $50.40. This accounting did not absolve the landlord of liability for treble damages. The landlord‘s failure to return the security deposit within forty-five days after the tenant‘s surrender of the premises established that the retention of the entire deposit was wrongful. See Martinez, 623 P.2d at 54. The landlord‘s deliber-
III. Conclusion
The judgment of the district court is affirmed.
Justice KOURLIS concurs in part, and dissents in part.
Justice KOURLIS concurs in part, and dissents in part.
I concur in part and dissent in part. I agree that the landlord did not account for or return the security deposit within the applicable time frame, and is thus liable for treble damages and attorneys’ fees. I disagree, however, as to the majority‘s construction of “wrongfully withheld” and the amount of such treble damages.
A landlord who fails to account for a tenant‘s security deposit within the statutory period may not avoid treble damages by accounting for the deposit during the subse-
The majority holds that because none of the deposit was accounted for within the 45 days after tenant‘s surrender of the premises, the entire security deposit was wrongfully withheld. The majority suggests that treble damages will be assessed against a portion of the security deposit only where a landlord timely accounts for the retention of part of the deposit but fails to return the portion for which no accounting is made. I disagree.
I. Statutory Requirement
The applicable statute provides, first, that the landlord shall return the security deposit to the tenant, or the deposit minus any retention, within one month after termination or within a longer period of time—not to exceed sixty days—as provided by the lease agreement.
However, I differ as to the application of the provision in subsection (3)(a) that provides:
“The willful retention of a security deposit in violation of this section shall render a landlord liable for treble the amount of that portion of the security deposit wrongfully withheld from the tenant, together with reasonable attorneys’ fees and court costs.”
In Turner v. Lyon, 189 Colo. 234, 539 P.2d 1241 (1975), the landlord failed to return the security deposit to the tenants before the tenants filed a demand-notice pursuant to
Following Turner, we implicitly addressed the meaning of “wrongfully withheld” in Heatherridge Mgmt. Co. v. Benson, 192 Colo. 190, 558 P.2d 435 (1977) overruled on other grounds by Schneiker v. Gordon, 732 P.2d 603 (Colo.1987). In Heatherridge, the tenant quit the rental premises and authorized the 2 landlord to deduct one month‘s rent from the security deposit but the landlord failed to return any of the security deposit. We held that only the portion beyond the amount held for one month‘s rent had been wrongfully withheld, thus, damages were calculated on the basis of treble that amount.2 Id. Our decision was not dependent upon whether an accounting was provided before or after the statutory period. In fact, the trial court had found that the landlord failed to mail an accounting to the tenant at his new address. Therefore, I disagree that Heatherridge established that any amount not accounted for is “wrongfully retained.”
We again addressed the issue of wrongful retention as it relates to treble damages in Guzman v. McDonald, 194 Colo. 160, 162, 570 P.2d 532, 533 (1977). After the tenants vacated the premises, in that case, the landlord gave them written notice of his intent to retain the $150 security deposit. The tenants then filed a suit in county court. The trial court found that the landlord sustained actual damages of $35.75 and accordingly entered judgment in the amount of $114.25 in favor of the tenants but denied treble damages. Id. at 161, 570 P.2d at 532. On appeal, this court determined that the trial court must find the landlord‘s retention of the security deposit was in good faith before denying treble damages and attorneys’ fees and costs. In Guzman, we emphasized that the general assembly intended that the retention be “wrongful” in addition to “willful” and held that “a landlord who gives notice and lists the reasons for the retention of any portion of the security deposit should not be subjected to the statutory award of treble damages . . . in the absence of bad faith.”3 While the landlord in Guzman provided notice to the tenants prior to the 30 days, I view the principle concerning calculation of the amount wrongfully retained as relevant here.
The final case on which the majority relied, Martinez v. Steinbaum, 623 P.2d 49 (Colo. 1981), is factually distinct from Heatherridge 3
II. Application
In this case, the Young-Mishkin lease was terminated August 3, 2001. The county court found that the applicable period for return of the security deposit was 45 days, extended by operation of amendment to the lease upon the second year. Thus, Mishkin was required to return the security deposit or provide an accounting by September 17, 2001 to avoid forfeiture of the entire security deposit. Application of the statute to those findings lead to the conclusion that Mishkin did indeed violate the statute by failing to return or account for the deposit within 45 days after August 3, 2001.
When Mishkin failed to contact Young before the expiration of the applicable period, Young filed a demand notice on September 20, 2001. In response, Mishkin provided an accounting, receipts, and a check in the amount of $50.40 on September 26, 2001. The county court found that the damage to the premises exceeded the amount retained by Mishkin, but that the accounting was inadequate to avoid forfeiture under the statute.
By virtue of the county court finding that the withholding was not wrongful as to the $1,574.60, I would conclude that the statute mandates an award of treble the amount of $50.40 plus attorneys’ fees and costs to the tenant, Young—not treble the amount of $1,574.60.
III. Conclusion
The majority concludes that a failure to provide an accounting within the statutory time frame makes the retention of any portion of the security deposit necessarily wrongful. I disagree. That construction vitiates the need for the qualifying language in the statute itself, because mere retention beyond the 30 (or 45 day period here) would trigger trebling of the entire amount of the deposit: not trebling of “that amount wrongfully withheld.”
RUSH CREEK SOLUTIONS, INC., Plaintiff-Appellee, v. UTE MOUNTAIN UTE TRIBE, Defendant-Appellant.
No. 03CA0517.
Colorado Court of Appeals, Div. II.
Aug. 12, 2004.