Covid-19 no excuse for landlord not returning security deposit to former tenants, court rules

A Fenway landlord that wouldn't return the security deposit to two tenants who moved out in August, 2020 has to pay them that deposit times three, the costs of their attorney to get that check and now the extra legal fees they racked up when the landlord appealed a court's decision to grant the tenants their treble damages, the Massachusetts Appeals Court ruled today.

When the two tenants of Traynor Management's 57 Westland Ave. moved out on Aug. 31, 2020, an agent for the landlord's facilities manager inspected their apartment and concluded they had not damaged it and so they were eligible for repayment of their $2,425 security deposit. But they still hadn't gotten it 30 days after they moved out - as required by state law - and eventually sued in Housing Court.

A Housing Court judge ruled they were entitled to $7,275, or three times their initial security deposit, as called for by state law, plus $17,780 for legal costs

Traynor Management appealed, arguing, among other reasons, they couldn't make the payment because of "force majeure," essentially something completely out of its control: The Covid-19 pandemic. The company argued that, like so many others, it had to shut its offices due to the pandemic and so therefore couldn't make the payment.

The appeals court curtly dismissed that argument. Force majeure relates to contracts and the requirement that landlords return security deposits after being assured there was nothing wrong with an apartment after it's been vacated is codified in state law, so is not a contract issue. Plus, Traynor only raised that issue for the first time in its appeal, the court said:

This argument is waived; the landlord never raised such a defense in its answer, or in its summary judgment opposition, or at the summary judgment hearing. Moreover, the concept of force majeure is generally applied in contract disputes, and the landlord cites no authority for applying it to protect a party from a statutory liability such as the one at issue here. Finally, the landlord's summary judgment opposition cited no evidence suggesting that the pandemic prevented it from timely returning the deposit by mailing a check or checks to the tenants.

The court also rejected an argument by Traynor that it tried to make arrangements with one of the tenants to pick a check up at its office, saying the company knew that wouldn't work because the tenant had moved to New York - and that the tenant argued he never got the phone call in which that offer was allegedly made.

The court agreed with the housing-court judge that at first glance, the $17,780 the tenants' lawyer wanted - representing more than 59 hours of work - "seems extraordinarily high for a security deposit case."

But like the Housing Court judge, the appeals court agreed that was mostly Traynor's fault, caused by a legal strategy that consisted of fighting the tenants at every single turn and making detailed motions that required answers, so "after examining the time records of the [tenants'] attorney and noting the extraordinary amount of work which he was obliged to do on account of the demands of the [landlord's] defense strategy, the [c]ourt finds that the time spent was reasonable."

The appeals court then piled on, saying that on top of that amount, the tenants' attorney is also entitled to be reimbursed for all the work he did dealing with Traynor's appeal of that decision:

The tenants are invited to file a verified and itemized application for such fees and costs within fourteen days of the date of this decision, and the landlord will have fourteen days thereafter in which to file any opposition to the amounts requested.

Case docket, includes copies of arguments by both sides.