In Angelo Property Co. v. Maged Hafiz (Division 2, April 17, 2012), the Court of Appeals goes into a lot of detail (and that’s saying something, coming from me) explaining the limits of the trial courts’ unlawful detainer jurisdiction. I’ll do my best to sum up the Court’s 37 pages in, well, something less than that.
Maged (as he referred to himself in his papers) leased a commercial property in Vancouver, Washington from Angelo Property; he ran a nightclub called The Nile on the property. There was some dispute between Maged and Angelo, which resulted in Angelo filing an unlawful detainer action against Maged in an effort to kick him out.
Washington law provides for a “summary proceeding” in unlawful detainer actions that is “designed to facilitate the recovery of possession of leased property; the primary issue for the trial court to resolve is the ‘right to possession’ as between a landlord and a tenant.” The summary proceeding has limited discovery and occurs on shortened time. But it is a limited proceeding. A trial court in an unlawful detainer action can only determine (1) the right of possession and (2) counterclaims “based on facts which would excuse a tenant’s breach.”
After Angelo filed its case against Maged, Maged decided he’d had enough of renting from Angelo. So he surrendered the property, answered the unlawful detainer complaint, and asserted various counterclaims against Angelo. Because the counterclaims went beyond the “facts which would excuse a tenant’s breach,” Maged also asked the trial court to convert the case to a regular civil action. Such a conversion would (a) allow Maged to bring his unrelated counterclaims and (b) give Maged the full arsenal of civil discovery and the extra time provided by the Civil Rules.
In response to Maged’s counterclaims (and related motion practice) the trial court (a) concluded that, despite Maged’s surrender of his possessory interest, Angelo’s unlawful detainer action continued because “legal” possession was still an issue, (b) declined to convert the action to a general civil action, (c) permitted Maged to assert some (but not all) of his counterclaims because they were sufficiently related to the unlawful detainer action, and (d) granted summary judgment in Angelo’s favor.
The Court of Appeals didn’t like any of those decisions. But before I get to that, a note on “jurisdiction.” I put that word in quotes because, while the Court uses the term “subject matter jurisdiction” throughout the opinion to refer to the trial court’s power to hear certain claims in an unlawful detainer proceeding, the Court disclaims making any decision on whether the trial court’s power in this case is truly “jurisdictional” or merely a matter of statutory “authority.” The distinction doesn’t matter here because (according to the Court of Appeals) Maged timely raised all the relevant issues in the trial court and on appeal, so there’s no issue of waiver; the Court just needed to decide the legal issues presented. Regardless, given the Court’s proclaimed agnosticism on the jurisdictional nature of the relevant questions, I’d much prefer the Court not use the term “jurisdiction,” which has all sorts of connotations.
But anyway, sorry, I know I said I would be pithy! Despite going on for 37 pages in its opinion, the Court of Appeals actually made pretty quick and simple work of this case. First, the Court looked at Maged’s counterclaim that the trial court permitted to go forward in the unlawful detainer action. The counterclaim did involve the terms of the lease, but that is not the standard. The counterclaim can only be heard if it is “based on facts which would excuse a tenant’s breach.” That determination is specific. In other words, it is not sufficient that the counterclaim is based on facts of a sort which might, in some circumstances, provide an excuse. Rather, the court must look to the specific nature of the plaintiff’s unlawful detainer claim and determine whether, based on the specific claim, the proposed counterclaim is based on facts that would excuse a tenant’s breach under the theory actually advanced by the plaintiff. Here, Maged’s counterclaim was not based on sufficiently related facts, so it should not have been heard in the unlawful detainer action.
Second, the Court looked more generally at the trial court’s authority in the unlawful detainer action. Unlawful detainer actions are meant to determine actual and legal possession of leased property. Therefore, according to the Court of Appeals, once Maged forfeited his right to actual or legal possession of the property, the unlawful detainer action was mooted — or, in the Court’s language, the trial court’s “jurisdiction” was “extinguished.”
Once the unlawful detainer “jurisdiction” was extinguished, the trial court lost the power to issue any rulings or take any action without first converting the action into a run-of-the-mill civil action with all the protections and rights of the Civil Rules. But the trial court did not effect such a conversation. Accordingly, the Court of Appeals vacated every one of the trial court’s orders entered after Maged’s concession. The trial court had no power to issue any rulings under its unlawful detainer authority once that matter was closed.
So the trial court did a few things wrong. It should have either (a) terminated the unlawful detainer proceeding or (b) converted it to a civil action as soon as Maged conceded possession. And while the unlawful detainer proceeding was alive and kicking, the court should not have permitted Maged’s counterclaims to be asserted in the action. Maged did a nice job with this at the trial court: He specifically forfeited possession just so that the unlawful detainer action could be converted into a general civil action, which would then permit him to assert his counterclaims. A good plan, except the trial court wasn’t on board. I imagine he’ll have better luck on remand.