Homeowners sued a property management company for breach of contract and negligence after tenants placed by the manager operated a methamphetamine lab that caused an explosion and rendered the property uninhabitable.
The court found the manager misrepresented that the management contract was identical to a sample contract, which altered a liability clause from negligence to gross negligence.
Applying principles from cases including Tilden Rent-A-Car v. Clendenning and Crocker v. Sundance Northwest Resorts Ltd., the court held the defendant was estopped from relying on the altered limitation clause.
The manager breached its contractual obligations and the standard of care by failing to conduct promised tenant screening, failing to disclose deficiencies in the screening process, and failing to pursue eviction when arrears and warning signs emerged.
These failures caused the plaintiffs’ loss.
