This section contains the nature of the case and procedural background.

Hilder (P) rented an apartment from St. Peter (D) with her three children and her newborn grandson. P orally agreed to pay D $140 per month and a damage deposit of $50. P paid D the first month’s rent and the damage deposit prior to moving in. P paid all of her rent, but because the previous tenants had left behind garbage and personal belongings, D offered to refund P’s damage deposit if she would clean the apartment and take possession. P did clean the apartment but never got her deposit back because D denied receiving it. Upon moving into the apartment, P discovered a continuing wealth of problems. There were problems with sewage leaks, water leaks, broken locks, windows, and toilets, and falling plaster. Although P notified D of the problems, D did nothing to remedy the situation. P occupied the apartment for fourteen months and then sued P to recover the money paid. The court awarded P damages, and D appealed. The court held that the state of disrepair, which was known to the landlord, substantially reduced the value of the leasehold from the agreed rental value thus constituting a breach of the implied warranty of habitability. The trial court based its award of damages on the breach of warranty and on breach of an express contract.

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