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Unfortunately, from a purely legal perspective, if it was defective fixtures that caused the water damage, then that wouldn't be the responsibility of the tenant. The landlord has a duty to periodically inspect their property or at least inquire of the tenant if there are any problems that they need to address. So I would have to agree with the judge that the tenant had no affirmative duty to notify you about problems unless it is specifically spelled out in their lease that they have to do so.
As an aside, in addition to being an attorney, I have also been a landlord for over 26 years...
I am very sorry that I don’t have better news, but please understand that I do have an ethical and professional obligation to provide customers with legally correct answers based on my knowledge and experience, even when I know the answer doesn’t make the customer happy...