Pinnacle Properties Development Group, LLC v. David Daily (mem. dec.) ( 2016 )

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D), FILED
this Memorandum Decision shall not be Jul 15 2016, 9:16 am
regarded as precedent or cited before any
CLERK
court except for the purpose of establishing Indiana Supreme Court
Court of Appeals
the defense of res judicata, collateral and Tax Court
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT
William Perry McCall, III
Mosley Bertrand and McCall
Jeffersonville, Indiana
IN THE
COURT OF APPEALS OF INDIANA
Pinnacle Properties July 15, 2016
Development Group, LLC, Court of Appeals Case No.
Appellant-Defendant, 10A01-1512-SC-2275
Appeal from the Clark Circuit
v. Court
The Honorable Kenneth R.
David Daily, Abbott, Magistrate
Appellee-Plaintiff. Trial Court Cause No.
10C03-1507-SC-1153
Crone, Judge.
Statement of the Case
[1] Pinnacle Properties Development Group, LLC (“Pinnacle”) appeals a $752.37
judgment in favor of residential tenant David Daily in his small claims action
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for breach of contract. 1 On appeal, Pinnacle asserts that the trial court erred
when it concluded that Pinnacle breached its contract with Daily and also that
the court abused its discretion in awarding Daily certain damages. Finding no
error or abuse of discretion, we affirm.
Facts and Procedural History
[2] On October 16, 2014, Daily executed a Lease Agreement (“the Lease”) with
Pinnacle to rent an apartment located in Jeffersonville. Prior to executing the
Lease, Daily had an opportunity to inspect the apartment, and he had an
opportunity to read the Lease. The Lease provided, in relevant part:
9. Alterations and Maintenance of Leased Premises
***
B. Tenant shall immediately notify Landlord, in writing, of any
damage to the Leased Premises.
C. Landlord, within a reasonable time after written notice from
Tenant of the need therefore, and subject to Tenant’s obligation
to make the Leased Premises available as set out above, shall
1
We note that Pinnacle failed to submit an appendix on appeal which presumably would have included a
copy of Daily’s small claims complaint. Indiana Appellate Rule 49(B) states that a party’s “failure to include
any item in an Appendix shall not waive any issue or argument.” Even so, Appellate Rule 49(A) clearly
contemplates that an appendix will be filed: “The appellant shall file its Appendix with its appellant’s brief.”
(Emphasis added.) Similarly, Appellate Rule 50(A)(1) reads, “The purpose of an Appendix in civil appeals
... is to present the Court with copies of only those parts of the record on appeal that are necessary for the
Court to decide the issues presented.” In addition to the chronological case summary, appealed order,
pleadings, and various other documents, Rule 50(A)(2) requires that the appendix include “other documents
from the Clerk’s Record in chronological order that are necessary for resolution of the issues raised on
appeal[.]”
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make all repairs necessary to maintain the exterior and structural
walls, structural floors (excluding floor coverings), HVAC
systems, foundations, roof, gutters, and exterior downspouts of
the Leased Premises in the same condition they are now in,
except to the extent that the acts or omissions of any one of the
Occupants necessitates such repairs. Tenant shall be responsible
for the cost of all other repairs not required to be made by
Landlord to maintain the Leased Premises in at least as good a
condition as it is now in. . . . Notwithstanding Tenant’s
obligation for the costs of repairs hereunder, nothing in this
Lease shall be deemed or construed to constitute a consent to, or
a request to any party for the performance of, any labor or
services or the furnishing of any materials or equipment for the
improvement, alteration, or repairing of the Leased Premises;
***
D. Notwithstanding the above, if the Leased Premises is
damaged by flood, wind, rain, fire, or other destructive act of
God such that the Leased Premises is uninhabitable for any
length of time, Landlord shall have ninety (90) days from receipt
of notice from Tenant within which to repair and restore the
Leased Premises without terminating this lease, it being agreed
that Landlord shall not be liable to Occupants for any damage to
Occupants or Occupant’s property. If a part of the Leased
Premises shall be damaged as mentioned above, but not so as to
render the entire Leased Premises uninhabitable, the Monthly
Rent shall abate in proportion to that part of the Leased Premises
which is uninhabitable. If the damage to the Leased Premises
shall be so extensive as to render the entire Leased Premises
wholly uninhabitable, the Monthly Rent shall cease from the
time the Landlord is notified, in writing, of such damages until
the Leased Premises is restored to a habitable condition; and,
after the Leased Premises are so restored, the Monthly Rent shall
begin to accrue again and be payable as before the damage.
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Daily’s Ex. 3 at 7-8. In addition to the written Lease, the record indicates that
Pinnacle provided Daily with a phone number to call in the event of an
emergency.
[3] From the date of the execution of the Lease in October 2014 to June 2015,
Daily did not experience any incidents of flooding in the leased premises.
However, beginning on June 26, 2015, Daily experienced substantial periodic
flooding through the patio door of the leased premises. The flooding happened
on June 26, July 2, July 12, and July 14. After each incident of flooding, Daily
called Pinnacle’s emergency telephone number to report the flooding. On June
26, he did not reach a live person at the emergency number so he left a voice
mail message informing Pinnacle of the flooding. Daily received no response to
that message. Daily borrowed a wet/dry vacuum and removed thirty gallons of
water from the leased premises on June 26.
[4] On July 2, Daily again called Pinnacle’s emergency telephone number, and he
reported the second flooding. The person who answered the telephone told
Daily that there was nothing Pinnacle could do about the flooding, but that she
would “send someone out” to the premises. Tr. at 38. However, no one from
Pinnacle ever came to the leased premises. Daily removed twelve gallons of
water from the premises with a borrowed wet/dry vacuum.
[5] On July 12, Daily again called Pinnacle to report flooding, and he was again
told that there was nothing Pinnacle could do about the problem but that they
would send someone over to his unit. Once again no one from Pinnacle came
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to the leased premises, and Daily removed the water on his own with a
borrowed wet/dry vacuum. He removed forty gallons of water.
[6] On July 14, Daily personally went to the Pinnacle management office to report
the fourth flooding. He showed the Pinnacle employee pictures of the flooding.
Pinnacle put a “work order” into their system but, again, no one from Pinnacle
came to the leased premises. Id. at 46. This time Daily bought a wet/dry
vacuum for $53.37 because he believed the flooding would continue without
any remedial action from Pinnacle. Daily removed twenty-five gallons of water
from the leased premises on July 14.
[7] Daily continued to live in the leased premises. However, on July 22, Daily filed
a complaint against Pinnacle in small claims court, seeking damages in the
amount of $3,330.68. Following a hearing, the trial court entered judgment for
Daily in the amount of $699 for the rent Daily had paid for the month of July
and $53.37 for the cost of the wet/dry vacuum Daily had purchased, plus court
costs and post-judgment interest. This appeal ensued.
Discussion and Decision
[8] Initially we note that Daily has failed to file an appellee’s brief. Therefore, the
trial court’s decision may be reversed upon a showing of prima facie error. Ind.
Appellate Rule 45(D); Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1068 (Ind.
2006) (holding that, when the appellee has failed to submit an answer brief, the
court on appeal need not undertake the burden of developing an argument on
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the appellee’s behalf; rather, the court on appeal will reverse the trial court’s
judgment if the appellant’s brief presents a case of prima facie error).
[9] Our standard of review in a small-claims court case is clear:
Small-claims court judgments are “subject to review as prescribed
by relevant Indiana rules and statutes.” Ind. Small Claims Rule
11(A). Under Indiana Trial Rule 52(A), the clearly erroneous
standard applies to appellate review of facts determined in a
bench trial with due regard given to the opportunity of the trial
court to assess witness credibility. This deferential standard of
review is particularly important in small-claims actions, where
trials are designed to speedily dispense justice by applying
substantive law between the parties in an informal setting.
Berryhill v. Parkview Hosp., 962 N.E.2d 685, 689 (Ind. Ct. App.
2012). But this deferential standard does not apply to the
substantive rules of law, which are reviewed de novo just as they
are in appeals from a court of general jurisdiction. Id.Vance v. Lozano, 981 N.E.2d 554, 557-58 (Ind. Ct. App. 2012).
[10] In awarding Daily $699 for the rent he had paid in July, the trial court
essentially concluded that Pinnacle breached its Lease with Daily by failing to
repair the damage from the flooding. Pinnacle claims this was error. Indiana
courts have recognized the contractual nature of leases and the applicability of
the law of contracts to leases. See, e.g., Murat Temple Ass’n, Inc. v. Live Nation
Worldwide, Inc., 953 N.E.2d 1125, 1129 (Ind. Ct. App. 2011), trans. denied. A
lease is interpreted in the same way as any other contract. Indiana Port Comm'n
v. Consol. Grain and Barge Co., 701 N.E.2d 882, 887 (Ind. Ct. App. 1998), trans.
denied (1999). The rules of construction of a contract are well-settled:
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The ultimate goal of any contract interpretation is to determine
the intent of the parties at the time that they made the agreement.
First Fed. Sav. Bank of Indiana v. Key Mkts., Inc., 559 N.E.2d 600,
603 (Ind. 1990). We begin with the plain language of the
contract, reading it in context and, whenever possible, construing
it so as to render each word, phrase, and term meaningful,
unambiguous, and harmonious with the whole. Trustcorp Mortg.
Co. v. Metro Mortg. Co., Inc., 867 N.E.2d 203, 213 (Ind. Ct. App.
2007). “A contract is ambiguous if a reasonable person would
find the contract subject to more than one interpretation.”
Fackler v. Powell, 891 N.E.2d 1091, 1096 (Ind. Ct. App. 2008)[,
trans. denied (2009)]. If we find ambiguous terms or provisions in
the contract, “we will construe them to determine and give effect
to the intent of the parties at the time they entered into the
contract.” George S. May Int’l. Co. v. King, 629 N.E.2d 257, 260
(Ind. Ct. App. 1994) (internal citations omitted), trans. denied.
Citimortgage, Inc. v. Barabas, 975 N.E.2d 805, 813 (Ind. 2012).
[11] Pinnacle claims that the trial court ignored the provisions in the Lease which
required Daily to give Pinnacle written notice of the flooding and which then
allowed Pinnacle ninety days within which to make the necessary repairs and
restore the property. See Daily’s Ex. 3 at 8. While we do not necessarily agree
with Pinnacle that Daily was required to give written notice to Pinnacle when
the flooding rendered the leased premises only partially uninhabitable as
contemplated by Paragraph 9(D) of the Lease, we need not reach that issue. 2
2
Paragraph 9(D) of the Lease provides in relevant part that if “part of the Leased Premises shall be damaged
as mentioned above, but not so as to render the entire Leased Premises uninhabitable, the Monthly Rent shall
abate in proportion to that part of the Leased Premises which is uninhabitable.” See Daily’s Ex. 3 at 8.
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[12] It is well-established that we will affirm a general judgment entered in a small
claims case if it can be sustained on any legal theory supported by the evidence.
Collections, Inc. v. Wolfe, 818 N.E.2d 14, 16 (Ind. Ct. App. 2004). Even if the
plain language of the Lease required that Daily give written notice to Pinnacle
when the flooding rendered the leased premises only partially uninhabitable,
the evidence is undisputed that Pinnacle had actual notice of the flooding, and
therefore we would find that Pinnacle is equitably estopped from asserting lack
of written notice as a defense to its breach of the Lease. Our supreme court has
stated, “Estoppel is a judicial doctrine sounding in equity. Although variously
defined, it is a concept by which one's own acts or conduct prevents the
claiming of a right to the detriment of another party who was entitled to and did
rely on the conduct.” Brown v. Branch, 758 N.E.2d 48, 51-52 (Ind. 2001). “The
doctrine of estoppel springs from equitable principles and is designed to aid in
the administration of justice where, without its aid, injustice might result.”
Lockett v. Planned Parenthood of Ind., Inc., 42 N.E.3d 119, 136 (Ind. Ct. App.
2015), trans. denied (2016).
[13] There is no question that injustice would result if Pinnacle were permitted to
avoid refunding Daily the rent paid during the period the premises were
partially uninhabitable simply because he did not give Pinnacle written notice
of the flooding. Daily repeatedly gave Pinnacle actual notice of the flooding.
After each flooding incident, he called the specific emergency number provided
to him by Pinnacle. He left a message on the first occasion and, on the second
occasion, he actually spoke to a live person who said that she would “send
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someone out.” Tr. at 38. On yet another occasion when he called the
emergency number, he spoke to another person who promised to send someone
out to his premises. To Daily’s obvious detriment, Pinnacle gave Daily false
assurances that it would take care of the problem. Daily’s reliance on
Pinnacle’s assurance was unquestionably justified. We can hardly imagine a
more appropriate application of the equitable estoppel doctrine. The trial court
did not err in concluding that Pinnacle breached the Lease and in awarding
Daily $699 for the rent paid during the period of partial uninhabitability.
[14] As a final matter, Pinnacle challenges the trial court’s decision to also award
Daily $53.37 for the cost of the wet/dry vacuum he purchased. It is well settled
that a party injured by a breach of contract is limited in his recovery to the loss
actually suffered, and he may not be placed in a better position than he would
have enjoyed had the breach not occurred. Hawa v. Moore, 947 N.E.2d 421, 427
(Ind. Ct. App. 2011). However, a party injured by a breach of contract may
recover consequential damages, namely damages that flow naturally and
probably from the breach and were contemplated by the parties when the
contract was made. Rockford Mut. Ins. Co. v. Pirtle, 911 N.E.2d 60, 67 (Ind. Ct.
2009), trans. denied (2010). Our review of a damages award is limited, and we
will reverse an award only when it is not within the scope of the evidence before
the finder of fact. Sheek v. Mark A. Morin Logging, Inc., 993 N.E.2d 280, 287
(Ind. Ct. App. 2013), trans. denied (2014).
[15] Daily testified that after having to scramble around and borrow a wet/dry
vacuum on multiple occasions to remove the gallons upon gallons of water
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from his apartment when Pinnacle would not, he finally purchased a wet/dry
vacuum so that he could mitigate the damage caused by the continued flooding.
Clearly, the purchase of the vacuum was a consequential damage arising from
Pinnacle’s breach of the Lease. Accordingly, the trial court did not abuse its
discretion in awarding Daily $53.37 for the cost of the vacuum. The judgment
of the trial court is affirmed.
[16] Affirmed.
Najam, J., and Robb, J., concur.
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