Taylor v. Schukei Family Trust: Court Rules Oral Agreement to Make Repairs Can Impose Tort Liability upon Landlord

The Supreme Court of Wyoming has ruled that a landlord who entered into an oral agreement to make repairs to leased space, which is supported by adequate consideration, can be liable for injuries resulting from the failure to properly make these repairs.

The Schukei Family Trust ("Landlord") purchased a commercial building in 1993. The Landlord then leased the building to Schukei, Inc., d/b/a Valley Motor Supply ("Tenant"). The parties entered into an oral lease. They also had an oral agreement that the Landlord would be responsible for repairs to the exterior of the premises (including the overhead doors), while the Tenant would be responsible for repairs to the interior. In 1995, an overhead door caused injuries to one of the Tenant's employees. The employee filed a lawsuit against the Landlord, and the trial court ruled in favor of the Landlord, finding that the Landlord owed no duty to the Tenant's employees. The employee appealed.

On appeal, the Supreme Court of Wyoming reversed the lower court decision and sent the case back to the trial court for further proceedings. In general, under Wyoming law, a landlord is immune from liability for injuries to its tenants under the doctrine of caveat emptor, except in a few limited circumstances. One of these exceptions is when a landlord and tenant have an agreement regarding the handling of repairs. In this case, the trial court had ruled that this exception did not apply.

The Supreme Court ruled that the trial court had made the determination that the exception did not apply too quickly and needed to conduct further hearings to determine whether the Landlord had entered into an enforceable oral agreement with the Tenant to make repairs on the property. If the agreement to make repairs was simply a promise made by the Landlord during the course of the tenancy, and unsupported by consideration, then the court ruled that the Landlord would not owe a duty to the Tenant's employee. However, if the trial court concluded that the agreement to make repairs was a "mutual understanding" between the parties, made either at the outset of the lease or at the time the tenancy was extended, then this promise would be supported by adequate consideration. In that case, the Landlord could be liable for the Tenant's employee's injuries resulting from its failure to make the promised repairs adequately.

Next, the court considered whether the fact that this promise was made orally had any effect on the sufficiency of the agreement. This was the first time a Wyoming court had considered this issue. Looking at how other states had decided this issue, the court found that several states have found a landlord liable for injuries resulting from the failure of the landlord to adequately make repairs when the lease was in writing (Florida, Illinois, Massachusetts, Michigan, and New York). And in Arkansas, an oral lease is sufficient to bind a landlord. The court ruled in this case that an oral lease agreement to make repairs can bind a landlord in Wyoming. Thus, it remanded the case back to the trial court for further proceedings to determine when the agreement between the Landlord and Tenant had been made.

Taylor v. Schukei Family Trust, 996 P.2d 13 (Wyo. 2000).

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