Dyamond Harris v. Lafayette LIHTC, LP , 85 N.E.3d 871 ( 2017 )

FILED
Oct 13 2017, 10:10 am
CLERK
Indiana Supreme Court
Court of Appeals
and Tax Court
ATTORNEYS FOR APPELLANT ATTORNEY FOR APPELLEE
Ann Ginda Thomas J. Herr
Indiana Legal Services, Inc. Herr & Phillips, LLC
Lafayette, Indiana Lafayette, Indiana
Cynthia Smith
Law Office of Cynthia P. Smith
Lafayette, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Dyamond Harris, October 13, 2017
Appellant-Defendant, Court of Appeals Case No.
79A02-1703-SC-638
v. Appeal from the Tippecanoe
Superior Court
Lafayette LIHTC, LP, The Honorable Laura W. Zeman,
Appellee-Plaintiff Judge
Trial Court Cause No.
79D04-1702-SC-801
Crone, Judge.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 1 of 15
Case Summary
[1] Dyamond Harris appeals the trial court’s judgment and writ of possession in
favor of Lafayette LIHTC, LP, on its claim against Harris for unpaid rent.
Harris contends that the trial court committed clear error by improperly shifting
the burden of proof and violated her due process right to an impartial decision
maker. We agree on both counts and therefore reverse.
Facts and Procedural History
[2] On January 27, 2016, Harris entered into a lease with a landlord identified as
“Claystone at the Crossing” for a housing unit, number 22-0600, subsidized by
the Department of Housing and Urban Development (“HUD”). Appellant’s
App. Vol. 2 at 9.1 The lease was signed on behalf of Claystone by Mary Jo
Farr. Id. at 16. The term of the lease was from January 27, 2016, to December
31, 2016, after which it would continue for successive terms of one month
unless automatically terminated as permitted by paragraph 23. Id. Pursuant to
the lease, Harris agreed to pay rent of $45.00, due on the first day of the month.
Id. The lease also provided, “[Harris] has deposited $176.00 with [Claystone],”
which agreed to “hold this security deposit” for the period that Harris occupies
the unit. Id. at 11. Paragraph 23 of the lease governed termination of tenancy
and provided, “Any termination of this [lease] by [Claystone] must be carried
out in accordance with HUD regulations, State and local law, and the terms of
1
Lafayette alleges that Harris signed the lease on August 11, 2016. Appellee’s Br. at 7. However, that date is
when Harris signed a document titled “House Rules.” Appellant’s App. Vol. 2 at 29.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 2 of 15
this [lease].” Id. at 14. Pursuant to Paragraph 23, Claystone agreed to give
Harris written notice and the grounds for the proposed termination and advise
Harris “that [she] has 10 days within which to discuss the proposed termination
of tenancy with [Claystone]” and “If [Harris] requests the meeting, [Claystone]
agrees to discuss the proposed termination with [Harris].” Id. at 15.
[3] On February 28, 2017, Lafayette, doing business as Romney Meadows, filed a
notice of claim in the small claims court that alleged as follows:2
On or about the date of January 27, 2016 [Lafayette] rented or
leased to [Harris] the property located at 600 Northchester Lane,
Unit 22-0600, Lafayette, in Tippecanoe County, Indiana for the
term of one year and extended on a month to month basis.
[Harris] agreed to pay rent in advance on the 1st day of each
month. Rent is now past due in the amount of $38.00 more or
less.
Id. at 8. Lafayette demanded judgment for $38.00 past due rent, pro rata rent
through the date of possession, possession of the real estate, prejudgment
interest, and court costs of $121.00. Id. The notice ordered Harris to appear in
court on March 14, 2017. Harris received service of Lafayette’s claim on
March 3, 2017. Id. at 3.
2
Although Lafayette does not describe its connection to Claystone in its brief, a document titled “House
Rules” signed by Harris on August 11, 2016, states that Lafayette was doing business as Claystone.
Appellant’s App. at 20, 29.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 3 of 15
[4] At the March 14, 2017, hearing Lafayette appeared by counsel Thomas Herr
and two representatives referred to in the transcript as Ms. Horn and Ms.
Fleming. Harris appeared pro se. The trial court did not swear anyone in. The
trial court began the hearing by informing Harris that Lafayette claimed that
she had not paid her February 2017 rent and asking her if she had paid it.
Harris responded that when she first moved in, she had provided the former
landlord with two money orders for $45.00 each; that money was supposed to
be credited to her account, and Lafayette was supposed to use it for her rent. In
support, she attempted to show the trial court two handwritten receipts dated
January 28, 2016. Id. at 35; Tr. Vol. 2 at 4. Each receipt acknowledged a
money order of $45.00 for rent for “Building 22-600” from “Claystone at the
Crossing” and were purportedly signed by “Mary Jo Farr.” Appellant’s App.
Vol. 2 at 35. Although the receipts had Harris’s unit number, they did not have
her name written on them. The trial court asked Lafayette what it knew about
Harris’s explanation. Ms. Horn claimed that they knew nothing about it, and
Ms. Fleming said that they “just saw [the] receipts,” and “[Harris] just sprung
this on us today.” Tr. Vol. 2 at 4. Harris asserted that she had told them about
the receipts the week before. Id.
[5] Harris informed the trial court that she had driven to Chicago to get her
“paperwork,” explaining, “This is my first time having my own apartment on
my own[,] so my parents help me a lot[, and] keep my important papers.” Id. at
5. The trial court stated, “You’re an adult. … Mom and dad are out of the
picture now. You take care of yourself. Okay, now, who is paying your rent?
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 4 of 15
…. Thirty-eight dollars a month in rent?” Id. at 5-6. Harris replied, “Me.” Id.
at 6. The trial court responded, “No, no, this apartment does not cost them
thirty-eight dollars. Who else is paying your rent? Somebody is paying rent.
Me as a taxpayer[? I]s it Section 8? What is it?” Id. Ms. Fleming advised the
trial court that Harris’s housing was Section 8. The trial court then stated,
“Section 8, okay so what is it about you that requires Section 8 housing such
that you can’t keep track of thirty-eight dollars?” Id. Harris explained that
when she initially moved into the housing unit, there was another “landlord”
handling her case who no longer worked there and that Harris had given that
landlord the money orders and told her to keep the money in Harris’s account
until she had to pay rent one day. Id. Ms. Horn stated, “[W]e don’t actually do
paper receipts, it’s against our company policy.” Id. at 6-7. In apparent
reference to the receipts, the trial court stated, “I mean I can buy this at
Walgreens.” Id. at 7. Harris asserted that when she first moved in “everything
was done by paper” by “Clay Stone” and that “Mary Jo” handled her case, but
Mary Jo did not work there anymore. Id. The trial court then said, “Okay, so
if they say you owe thirty-eight dollars for February, just pay them the thirty-
eight to get it done.” Id. Harris asserted that she was “trying to explain” that
the money orders were supposed to be credited to her account. Id. The trial
court asked Harris why the 2016 receipts would apply to rent in 2017 rather
than to rent in January or February 2016. Id. Harris clarified that she had paid
the two money orders for January and February 2016 rent, but it later turned
out that she did not owe rent because she was not working during those
months. Id. at 8-9. She said that she should have a credit of $90.00 in her
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 5 of 15
account and she had two receipts, but Lafayette had a credit of only $45.00.
The trial court told Harris, “Okay, those receipts are basically worthless, okay.”
Id. at 10.
[6] The trial court asked the Lafayette representatives whether Harris owed rent for
January or February 2016. Id. at 11. Ms. Horn replied that “Harris owed …
fifty-nine dollars. They put a charge on here from January 27 of [2016] to
2/29/2016.” Id. The trial court observed that Harris had made a payment of
$45.00 on February 3, 2016. Id. The trial court again asked the Lafayette
representatives whether Harris owed rent for January and February 2016. Id. at
12. Ms. Horn said that Harris “still owed rent for Feb, January.” Id. Harris
interjected, “[T]hen they came back and fixed it. … I never worked in January
or February. If you don’t work, you don’t pay rent and [there is] paperwork
saying that I wasn’t working in January or February.” Id. at 12. The trial court
responded, “Which is one of the crazy things about our country now. You
have people who don’t work and free apartments[,] and the rest of us have to
work to pay for it. That’s one of the problems in our country.” Id. The trial
court then repeatedly asked Harris why she did not just pay the $38.00 as a
“practical matter … just to get this over with?” Id. at 12-13.
[7] The trial court and the parties continued to discuss whether Harris owed rent
for January and February of 2016. Finally, the trial court told Harris, “I have
nothing to document that you were not supposed to pay [rent] in January and
February of last year.” Id. at 15. Harris replied, “They got my, they got my
files[,] like that’s what I’m saying[,] they don’t give me my files. They have my
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 6 of 15
big folder with everything.” Id. Harris also told the trial court, “I called them
on Friday and told them I was going to bring my receipts in. …. She said just
bring them to court because I’m going to have to go to court regardless.” Id. at
17. The trial court then said, “Okay, how do we resolve this people? I have
nothing from you that proves that she owed rent and I have nothing that proves
you paid rent.” Id. Harris insisted that she did not have to pay rent in January
or February of 2016 and asked for a continuance so that she could obtain the
paperwork verifying that she did not have to pay rent in January or February of
2016. The trial court decided to continue the hearing to March 16, 2017.
[8] On that date, Lafayette appeared by counsel and Ms. Horn and Ms. Fleming.
Harris appeared pro se. The trial court asked Harris if she had the papers “to
show that, that you paid rent that you did not need to pay in January and
February.” Id. at 21. Harris replied, “No, because they won’t give me my
papers in my file. I asked for my papers …” Id. Harris had some documents
that she attempted to show the trial court, but the trial court said, “No, I’m not
going through twelve pieces of paper.” Id. at 22. Lafayette’s counsel informed
the trial court that they agreed that Harris did not owe rent in January or
February 2016. Id. He also acknowledged that Harris had paid $45.00 in
February 2016 but that $30.00 of that payment was held as a security deposit
and the remaining $15.00 was held as a credit on Harris’s account. Id. at 23.
He said that Lafayette applied the $15.00 credit to the February 2017 rent of
$58.00 and Harris owed a balance of $38.00 for February 2017 rent. Id. at 24.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 7 of 15
[9] The trial court asked Harris, “Why are you not paying rent? I pay rent. I pay a
mortgage. Why don’t you?” Id. at 25. Harris said, “Because I wasn’t working.
When you don’t work[,] you don’t have to pay rent.” Id. The trial court
responded, “So [you] don’t work you get free rent? …. What a country, what a
country.” Id. Ms. Horn stated that Harris did not owe rent for January 2017,
but that she signed a document indicating that she would start paying rent in
February. The trial court informed Harris that she owed $38.00 for February’s
rent and $40.48 for rent through March 23, 2017. Harris said, “So is there any
other way I can like (inaudible)?” Id. at 29. The trial court told Harris, “This is
it. When you live somewhere you have to pay rent and you have to pay rent on
time. …. We’re asking you to pay a dollar seventy-six a day. Okay?” Id. At
the end of the hearing, the trial court entered judgment in favor of Lafayette
and against Harris for $78.48 plus court costs of $121.00 and issued a writ
granting Lafayette possession of the apartment on March 23, 2017.
[10] Harris, by counsel, filed a motion for stay to enforce judgment, which the trial
court denied, and a motion to proceed on appeal in forma pauperis, which the
trial court granted. Harris also filed a motion for leave to modify the clerk’s
record to include the two 2016 receipts she tendered, to which Lafayette
objected. The trial court issued an order to correct the clerk’s record to include
Harris’s tendered receipts and show that they were not admitted because there
was “no name on the receipts.” Appellant’s App. Vol. 2 at 36. This appeal
ensued. This Court granted Harris’s request for an emergency stay of
proceedings permitting her to remain in her apartment pending the appeal.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 8 of 15
Discussion and Decision
Section 1 - The trial court improperly shifted the burden of
proof to Harris.
[11] Harris asserts that the judgment is clearly erroneous because the trial court
improperly shifted the burden of proof to her. We note that judgments in small
claims actions are “subject to review as prescribed by relevant Indiana rules and
statutes.” Ind. Small Claims Rule 11(A). When we review claims tried by the
bench without a jury, we will not set aside the judgment “unless clearly
erroneous, and due regard shall be given to the opportunity of the trial court to
judge the credibility of the witnesses.” Ind. Trial Rule 52(A). “But this
deferential standard does not apply to the substantive rules of law,” which we
review de novo just as we do appeals from a court of general jurisdiction.
Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1068 (Ind. 2006). Harris’s
arguments present questions of law, which we review de novo. Morton v. Ivacic,
898 N.E.2d 1196, 1199 (Ind. 2008).
[12] We address Harris’s arguments in the context of small claims actions, which are
designed to be less formally structured than plenary proceedings. Matusky v.
Sheffield Square Apts., 654 N.E.2d 740, 742 (Ind. 1995). Indiana Small Claims
Rule 8(A) provides that a small claims trial “shall be informal, with the sole
objective of dispensing speedy justice between the parties according to the rules
of substantive law, and shall not be bound by the statutory provisions or rules of
practice, procedure, pleadings or evidence except provisions relating to
privileged communications and offers of compromise.” “The informality of
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 9 of 15
litigating in small claims court promotes doing substantial justice in a relatively
efficient way, conferring benefits on plaintiffs and defendants alike.” Morton,
898 N.E.2d at 1197. Nevertheless, “[t]he burden of proof in a small claims civil
suit is the same as it would be had the case been filed in a general trial court.”
Herren v. Dishman, 1 N.E.3d 697, 702 (Ind. Ct. App. 2013). “While the method
of proof may be informal, the relaxation of evidentiary rules is not the
equivalent of relaxation of the burden of proof. It is incumbent upon the party
who bears the burden of proof to demonstrate that it is entitled to the recovery
sought.” LTL Truck Serv., LLC v. Safeguard, Inc., 817 N.E.2d 664, 668 (Ind. Ct.
App. 2004). “A judgment in favor of a party having the burden of proof will be
affirmed if the evidence was such that from it a reasonable trier of fact could
conclude that the elements of the party’s claim were established by a
preponderance of the evidence.” City of Dunkirk Water & Sewage Dep’t v. Hall,
657 N.E.2d 115, 116 (Ind. 1995).
[13] We begin by observing that the only documentary evidence in the record before
us is the lease. The lease does not show that Harris has unpaid rent. Simply
put, there is no documentary evidence in the record that establishes that Harris
owes Lafayette money. Furthermore, at the March 14 hearing, the trial court
did not swear in any witnesses, despite the requirement that “[a]ll testimony
shall be given under oath or affirmation.” Ind. Small Claims Rule 8(B). The
trial court began the hearing by informing Harris that Lafayette claimed that
she had not paid her February 2017 rent and asking her if she had paid it. The
trial court then questioned the parties about Harris’s receipts, whether she had a
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 10 of 15
credit on her account, and whether she owed rent for January and February
2016. Finally, the trial court said, “I have nothing from you that proves that
she owed rent and I have nothing that proves you paid rent.” Tr. Vol 2. at 17.
The trial court decided to continue the hearing so that Harris could present
documents in support of her position. However, Lafayette had not met its
burden of proving that Harris owed it money. Thus, the trial court improperly
shifted the burden of proof.
[14] Lafayette asserts that the record does not support that the trial court improperly
shifted the burden of proof to Harris. According to Lafayette, the trial court’s
statement that, “I have nothing from you that proves that she owed rent and I
have nothing that proves you paid rent” referred to January and February of
2016 and that the trial court “mistakenly believed” that Lafayette was claiming
that Harris was required to pay rent for those two months. Appellee’s Br. at 18.
Lafayette maintains that the trial court’s “misunderstanding” was later
recognized and corrected when Lafayette stipulated that Harris owed no rent
for January and February 2016 and by “that point in the proceeding, Harris had
already admitted she was required to pay rent starting in February 2017.” Id. at
18-19 (citing Tr. Vol. 2 at 4).
[15] Lafayette mischaracterizes the record. The record clearly shows that the trial
court was not mistaken in believing that Lafayette claimed that Harris owed
rent for January and February of 2016. During the March 14 hearing, the trial
court twice asked the Lafayette representatives whether Harris owed rent for
January and February 2016, and they maintained that Harris did. Tr. Vol. 2 at
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 11 of 15
11-12. In fact, it was not until the hearing was reconvened on March 16 that
Lafayette acknowledged that Harris had not owed rent for January and
February 2016. Id. at 22. Lafayette admitted that Harris had paid $45.00 in
February 2016 but asserted for the first time that it withheld $30.00 for a
security deposit. As for Lafayette’s assertion that Harris had already admitted
that she was required to pay rent starting in February 2017, we disagree. Harris
never admitted that she owed Lafayette money for her February 2017 rent and
consistently maintained that there was money in her account to cover the rent.
Lafayette’s argument is without merit. We conclude that because Lafayette
failed to establish that Harris owed it money by the end of the March 14
hearing, the trial court improperly shifted the burden of proof and erred by
continuing the hearing rather than ruling against Lafayette. See LTL Truck
Serv., 817 N.E.2d at 668. Consequently, the judgment is clearly erroneous and
must be reversed.
Section 2 – The trial court failed to preside over the hearing as
a neutral, impartial decision maker in violation of Harris’s
due process rights.
[16] Notwithstanding our reversal of the trial court’s judgment, we also address
Harris’s argument that she was denied her due process right to an impartial
decision maker. Our review of the transcript leads us to agree with Harris.
[17] A “‘trial before an impartial judge is an essential element of due process.’” In re
J.K., 30 N.E.3d 695, 699 (Ind. 2015) (quoting Everling v. State, 929 N.E.2d 1281,
1287 (Ind. 2010)); see also Rynerson v. City of Franklin, 669 N.E.2d 964, 967 (Ind.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 12 of 15
1996) (A neutral, unbiased, adjudicatory decision maker is a core requirement
of due process.). A “‘biased decision maker [is] constitutionally unacceptable
[and] our system of law has always endeavored to prevent even the probability
of unfairness.’” Hewitt v. Westfield Washington Sch. Corp., 46 N.E.3d 425, 435
(Ind. 2015) (quoting Withrow v. Larkin, 421 U.S. 35, 47 (1975)).
[18] We afford trial judges ample “‘latitude to run the courtroom and maintain
discipline and control of the trial.’” J.K., 30 N.E.3d at 698 (quoting Timberlake
v. State, 690 N.E.2d 243, 256 (Ind. 1997)). However, a judge has a “‘duty to
remain impartial and refrain from making unnecessary comments or remarks.’”
Id. at 699 (quoting Lake Cty. Div. of Family & Children Servs. v. Charlton, 631
N.E.2d 526, 529 (Ind. Ct. App. 1994)). At all times the trial court “‘must
maintain an impartial manner and refrain from acting as an advocate for either
party.’” Id. (quoting Beatty v. State, 567 N.E.2d 1134, 1136 (Ind. 1991)). “A
violation of due process occurs where a trial judge combines the roles of judge
and advocate.” A.N. v. K.G., 3 N.E.3d 989, 995 (Ind. Ct. App. 2014), aff’d on
reh’g, 10 N.E.3d 1270.
The law presumes that a trial judge is unbiased. To overcome
that presumption, the party asserting bias must establish that the
trial judge has a personal prejudice for or against a party. Clear
bias or prejudice exists only where there is an undisputed claim
or the judge has expressed an opinion on the merits of the
controversy before him or her. Adverse rulings and findings by
the trial judge do not constitute bias per se. Instead, prejudice
must be shown by the judge’s trial conduct; it cannot be inferred
from his [or her] subjective views. Said differently, a party must
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 13 of 15
show that the trial judge’s action and demeanor crossed the
barrier of impartiality and prejudiced that party’s case.
Richardson v. Richardson, 34 N.E.3d 696, 703-04 (Ind. Ct. App. 2015) (citations
and quotation marks omitted).
[19] Here, the trial court asked questions and made comments throughout both
hearings that were improper. The trial court asked Harris, “Who else is paying
your rent? Somebody is paying rent. Me as a taxpayer? …. [What] is it about
you that requires Section 8 housing such that you can’t keep track of thirty-eight
dollars?” Tr. Vol. 2 at 6 (emphases added). The trial court told Harris, “Okay,
if they say you owe thirty-eight dollars for February just pay them the thirty-
eight to get it done.” Id. at 7. In a similar vien, the trial court repeatedly asked
Harris why she did not pay the $38.00 to “just get it done.” Id. at 13. The trial
court also commented, “You have people who don’t work and free
apartments[,] and the rest of us have to work to pay for it. That’s one of the
problems in our country.” Id. at 12. The trial court asked Harris, “Why are you
not paying rent? I pay rent. I pay a mortgage. Why don’t you.” …. So [you]
don’t work you get free rent? …. What a country, what a country.” Id. at 25
(emphases added). Lafayette contends that “none” of the trial court’s
comments are “disparaging” of any person. Appellee’s Br. at 17. We disagree.
The questions and comments belittle Harris for living in government-subsidized
housing and not paying Lafayette $38.00.
[20] We conclude that the trial court failed to preside over the hearing as a neutral,
impartial decision maker in violation of Harris’s due process rights. The trial
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 14 of 15
court’s actions and demeanor “‘crossed the barrier of impartiality and
prejudiced’” Harris’s case.3 See Richardson, 34 N.E.3d at 703-04 (quoting
Flowers v. State, 738 N.E.2d 1051, 1061 (Ind. 2000)). Accordingly, even if we
were not reversing the judgment based on the trial court’s error regarding the
burden of proof, we would reverse and order a new hearing by an impartial
judge.4
[21] Reversed.
Vaidik, C.J., and Mathias, J., concur.
3
See Ind. Judicial Conduct Canons 1.2., 2.3(B), and 2.8(B).
4
Based on our resolution of Harris’s burden-shifting claim and due process claims, we need not address her
arguments that she received insufficient notice and that the relief ordered by the trial court was unauthorized
by statute.
Court of Appeals of Indiana | Opinion 79A02-1703-SC-638| October 13, 2017 Page 15 of 15