Jerry Corbier and Stephanie Corbier v. William B. Nourse and Teresa L. Nourse ( 2013 )

Pursuant to Ind.Appellate Rule 65(D), this Aug 19 2013, 5:45 am
Memorandum Decision shall not be
regarded as precedent or cited before any
court except for the purpose of establishing
the defense of res judicata, collateral
estoppel, or the law of the case.
ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEE:
THOMAS G. BURROUGHS MARK SMALL
Katz & Korin, PC Indianapolis, Indiana
Indianapolis, Indiana
IN THE
COURT OF APPEALS OF INDIANA
JERRY CORBIER and )
STEPHANIE CORBIER, )
)
Appellants/Plaintiffs, )
)
vs. ) No. 29A04-1210-SC-545
)
WILLIAM B. NOURSE and )
TERESA L. NOURSE, )
)
Appellees/Defendants. )
APPEAL FROM THE HAMILTON SUPERIOR SMALL CLAIMS COURT
The Honorable Gail Z. Bardach, Judge
The Honorable David K. Najjar, Magistrate
Cause No. 29D06-1206-SC-5959
August 19, 2013
MEMORANDUM DECISION - NOT FOR PUBLICATION
VAIDIK, Judge
Case Summary
Jerry and Stephanie Corbier (“the Corbiers”) filed a small-claims action to evict
William and Teresa Nourse (“the Nourses”) from the home that they were leasing. The
Corbiers argued that the Nourses breached and repudiated the lease by failing to make the
lease payments on time and in a reasonable manner and by deducting maintenance
expenses from their monthly lease payment. The trial court held that the Nourses were
not in breach of the lease and held in their favor. As a result of the holding in their favor,
the Nourses were awarded reasonable attorneys’ fees as well. Finding that the Nourses’
actions were in compliance with the lease terms and not unreasonable, and that they were
entitled to reasonable attorneys’ fees, we affirm.
Facts and Procedural History
On March 31, 2011, the Nourses entered into a three-year lease contract to rent a
house in Carmel from the Corbiers for $3000 per month. T & H Realty (“T & H”), the
Corbiers’ rental agent, found the Nourses as tenants. However, T & H resigned as
property manager, claiming that the Corbiers breached the agreement that they had.
Steven Bauer acted as the rental agent for a time, but then Mr. Corbier took over the job.
The lease terms, which were never modified, required that rent be paid by the first of
every month to T & H through the Tenant Portal at www.therealtyinc.com. If the rent
was not received by the fifth of the month, a late charge was assessed, and if the rent was
not received by the seventh of the month, the Landlord could ask the Tenant to vacate or
begin eviction proceedings. Pl. Ex. 2.
2
After T & H resigned and Steven Bauer was no longer the property manager, the
written lease was never changed, but the Corbiers, who lived in Phoenix, Arizona,
requested the Nourses pay the rent directly into the Corbiers’ bank account at Bank of
America. Mr. Nourse testified, however, that the Patriot Act does not allow direct
transfers of that large of an amount of money unless the recipient bank has a location in
the same state as the sending bank. Because of this, Mr. Nourse testified that his bank
would not make the requested transfer to the Corbiers’ account at Bank of America, so he
was unable to send the rent money in that way. Instead, he sent a check to the Corbiers in
Arizona via certified mail. With the exception of February 2012, when the fifth fell on a
Sunday, every rent check was shown processed by the Phoenix postal department by the
fifth of the month. Pl. Ex. 4.
The lease terms also stated that the Corbiers would “fund any maintenance
requirement that exceeds $25.” Pl. Ex. 2. The Nourses had to make multiple repairs to
the property, and those repairs were not initially reimbursed by the Corbiers. The
Nourses filed a lawsuit, seeking, among other things, the cost of the repairs, and they
were awarded a judgment of $6087 on February 28, 2012. After the lawsuit, when they
had to make a repair, the Nourses deducted the amount of the repair from their rent
payment and attached the appropriate invoices to the rent check sent to the Corbiers. See
Pl. Ex. 10-11. The Corbiers did not object to this system until the filing of the present
lawsuit.
On June 8, 2012, the Corbiers filed an eviction complaint in small-claims court
contending the Nourses owed past-due rent and had breached the lease agreement.
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Appellant’s App. p. 12. The Nourses filed a counter-claim to authorize the rent
deductions made for repairs and to recover attorneys’ fees. A bench trial was held, and
the trial court found that all rent payments were made in a reasonable manner and on
time, and that the method of deducting repair amounts from the monthly rent was also
reasonable. Judgment was entered in favor of the Nourses on all issues, and each party
was ordered to pay its own attorneys’ fees. The Nourses filed a motion to reconsider on
the issue of attorneys’ fees, and the trial court entered judgment in favor of the Nourses
for their attorneys’ fees in the amount of $3306.
The Corbiers now appeal.
Discussion and Decision
Judgments in small-claims actions 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. Trinity Homes, LLC v. Fang, 848 N.E.2d 1065, 1067 (Ind. 2006). This
“deferential standard of review is particularly important in small claims actions, where
trials are informal, with the sole objective of dispensing speedy justice between the
parties according to the rules of substantive law.” Id. at 1067-68 (quotation omitted).
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. at
1068.
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The Corbiers contend that the trial court’s judgment is clearly erroneous because
the Nourses breached and repudiated the lease by not paying their rent on time in a
reasonable manner and by deducting maintenance expenses from the monthly rent
amount. The Corbiers also contend that the Nourses were not entitled to reasonable
attorneys’ fees. We disagree.
I. Method of Payments
The lease contract indicated that rent payments were to be made to T & H through
the tenant portal at www.therealtyinc.com. However, T & H resigned as the property
manager, so this provision regarding rent payment became impossible, creating a latent
ambiguity in the lease terms. A latent ambiguity “arises only upon attempting to
implement the contract.” Simon Prop. Group, L.P. v. Mich. Sporting Goods Distrib.,
Inc., 837 N.E.2d 1058, 1071 (Ind. Ct. App. 2005), trans. denied. When a contract
contains a latent ambiguity, it creates a question of fact that is to be resolved by the fact-
finder, and extrinsic evidence may be used to determine the meaning of the ambiguity.
Id. Any ambiguities should also be construed against the maker of the contract. MPACT
Constr. Grp., LLC v. Superior Concrete Constructors, Inc., 802 N.E.2d 901, 910 (Ind.
2004).
In this case, the trial court determined there was a latent ambiguity in the contract
once T & H resigned as the property manager. The contract was not modified to adjust
the way that payments were to be made once Mr. Corbier took over as property manager,
and there was no alternative method of payment indicated if T & H were to no longer be
the property manager, so the Nourses sent their rent checks directly to the Corbiers via
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certified mail. The trial court found this to be a reasonable method of payment that was
not contrary to any lease term. Additionally, the Corbiers did not object to this method of
payment before filing the eviction complaint, and each payment was deemed paid in a
timely manner, that is, before the fifth of the month when the Corbiers could have
assessed late fees.1 Appellant’s App. p. 6. Therefore, there was no evidence presented
that the method the Nourses used to pay their monthly rent was unreasonable, that there
were outstanding late fees owed to the Corbiers, or that this was a repudiation of the lease
indicating that the Nourses would not comply with the lease terms. We cannot say that
the trial court’s judgment on this issue was clearly erroneous.
II. Maintenance Deductions
The Corbiers also contend that the trial court erred in finding that deducting
maintenance expenses from the monthly rent payment was reasonable. We again
disagree.
The terms of the lease indicated that the Corbiers would be responsible for any
maintenance expense that exceeded $25.2 Id. at 64. However, the lease did not indicate
how reimbursements were to be made to the Nourses if they had to make the initial
payment, so deducting the maintenance requirements was not contrary to any lease term.
Id. at 7. The Nourses had to bring an action against the Corbiers to be reimbursed for
1
The February 2012 rent payment was received on the sixth of the month because the fifth fell on
a Sunday when there was no mail service. The trial court determined that this was not a late payment.
Appellant’s App. p. 8.
2
The Corbiers contend that the Nourses are responsible for the first $25 of each maintenance
payment, while the Nourses deducted the total amount of any maintenance payment that exceeded $25
from their rent check. Since the parties reasonably differed as to their interpretation of this lease term,
and any ambiguity in the contract is construed against the maker, MPACT Constr. Grp., LLC, 802 N.E.2d
at 910, we cannot say that the Nourses’ course of action was contrary to the lease terms.
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previous maintenance payments, so the trial court found that deducting the repair
amounts from their monthly rent was a reasonable solution to have the Corbiers fund any
maintenance requirement. The trial court also found that although this method of
reimbursement was reasonable, the Corbiers objected to this method in the lawsuit, so the
Nourses were put on notice that this was no longer an acceptable practice going forward.
However, the Corbiers failed to object to this method in any way before the filing
of the lawsuit, and there is no evidence that the Nourses’ conduct was a breach or
repudiation of the lease terms. We therefore cannot say that the trial court’s judgment on
this issue was clearly erroneous either.
III. Attorneys’ Fees
Finally, the Corbiers contend that the trial court erred in awarding reasonable
attorneys’ fees to the Nourses.3 However, the terms of the lease explicitly state: “In any
action or legal proceeding to enforce any part of this Agreement, the prevailing party
shall recover reasonable attorney fees and court costs.” Id. at 20. The trial court found
that since the lease terms were the basis for this action, the prevailing party was entitled
to reasonable attorneys’ fees. Id. at 11. As the lease term concerning attorneys’ fees is
clear on its face and the Nourses were the prevailing party, we cannot say that the trial
court erred in awarding reasonable attorneys’ fees to the Nourses.
Affirmed.
BAKER, J., and FRIEDLANDER, J., concur.
3
The Corbiers contest only the requirement that they pay the attorneys’ fees, not the
reasonableness of such fees. Appellant’s Br. p. 30.
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