Elliott v. Roach
| Decision Date | 28 August 1980 |
| Docket Number | No. 2-777A280,2-777A280 |
| Citation | 409 N.E.2d 661 |
| Parties | David Lawrence ELLIOTT, Appellant (Plaintiff and Cross-Defendant below), v. Dorrell C. ROACH, H. Kirkwood Yockey, Alma M. Yockey, Appellees (Defendants and Cross-Claimants below). |
| Court | Indiana Appellate Court |
Michael K. Sutherlin, Sutherlin, Kennedy & Miller, Indianapolis, for appellant.
Harry E. Riddell, Indianapolis, for appellees.
This appeal is brought by Dr. David L. Elliott, plaintiff and counter-defendant, from the final judgment of the Municipal Court of Marion County. Following a trial to the court, Elliott was awarded $40 against his former landlords, Alma M. and H. Kirkwood Yockey, defendants and counterclaimants, for the wrongful withholding of rental damage deposit. The court determined Elliott should receive nothing from a third defendant and counterclaimant, Dorrell C. Roach, rental agent for the Yockeys. Additionally there were judgments against Elliott on the defendants' counterclaims for defamation which alleged damages of $200,000 each. The Yockeys were individually awarded $1,500, and Roach received $2,500 for defamatory statements made by Elliott in a letter mailed to the Indiana Real Estate Commission, the Indianapolis Board of Realtors, the Independent Real Estate Brokers Association and the Better Business Bureau.
Elliott contends he should have received a larger damage award, including punitive damages, and that the judgments against him are contrary to law and should have been dismissed for lack of subject-matter jurisdiction. We affirm, holding the municipal court properly exercised its jurisdiction, pursuant to Ind. Rules of Procedure, Trial Rule 21(B), over counterclaims alleging $200,000 each for defamation despite the fact the demands of such counterclaims exceeded the then $10,000 subject-matter jurisdiction of the court over initial actions filed therein, 1 and that no errors of law were committed in awarding the judgments.
This action was commenced when Elliott filed suit with the Wayne Township Justice of the Peace for return of $64.50 of the $125 damage deposit paid to the Yockeys by Elliott and his wife. The defendants were granted a change of venue to the Municipal Court of Marion County, after which they filed an answer and their counterclaims demanding $200,000 each for the alleged defamation. The municipal court also permitted Elliott to amend his complaint to allege the wrongful withholding of $105, rather than $64.50, and to seek punitive damages of $5,000.
Although the evidence conflicted, the basic facts most favorable to the judgment are as follows: In October of 1973, Elliott and his wife, Carol, entered into a written agreement with the Yockeys for the month-to-month rental of a house on the west side of Indianapolis. The agreement provided for a monthly rent of $125 and a damage and clean-up deposit of $125. On April 29, 1974, the Elliotts were notified by letter of a rent increase of $25 per month effective June 20. The Elliotts then communicated to the Yockeys' rental agent, Mrs. Eleanor Faulknor, their intention to move by June 20. Thereafter, about June 1, Roach assumed Mrs. Faulknor's duties as rental agent; he testified he was verbally informed at that time of the Elliotts' intention to move but was not aware they had given Mrs. Faulknor written notice of their planned vacation of the premises as required by the lease terms.
After the Elliotts moved, Roach discovered certain repairs were necessary; the Elliotts' deposit was not refunded. In a letter to the Elliotts dated August 29 Roach set forth the landlords' reasons for withholding the deposit, which included lack of written notice the Elliotts were leaving, and the following:
"Loss of rent for one month ........... $150.00
Repair of storm door and bathroom
sink ................................ $ 17.50
Replacement of baseboard in dining
room ................................ $ 18.00
Retention of damage deposit per
lease agreement due to vacating in
less than one year .................. $ 25.00
--------
Total cost and loss to lessor .... $210.50"
All three defendants recalled speaking with Elliott at various times regarding his damage deposit but denied misleading him about the amount, if any, he could expect to receive as a refund. But in a letter dated March 12, 1975, Elliott charged Roach with "misleading, deceitful, unfair and dishonest practices in his capacity as agent for H. Kirkwood and Alma M. Yockey in failing to refund money previously secured . . . as (a) damage deposit . . ." and further contended all three defendants had "exposed themselves as dishonest, unscrupulous, and unworthy of the trust or patronage of their customers or tenants." The letter, addressed to the Indiana Real Estate Commission, noted copies were sent to the defendants, the Indianapolis Board of Realtors, the Independent Real Estate Brokers Association and the Better Business Bureau.
JURISDICTION OF THE MUNICIPAL COURT OVER COUNTERCLAIMS EXCEEDING MONETARY LIMIT ON INITIAL COMPLAINTS
We first consider the threshold question in this case of whether the municipal court had jurisdiction over the defendants' defamation counterclaims totaling $600,000 in alleged damages. Elliott contends that court should have dismissed the counterclaims because it lacked jurisdiction over tort claims in excess of $10,000 2 and because it cannot hear any claim founded on defamation. 3 The defendants respond jurisdiction was present and, even if it were not, the proper course for the municipal court would not be dismissal, but transfer to an appropriate court. We hold jurisdiction was present pursuant to T.R.21(B). Moreover, although it is not essential to our decision herein, we observe that even where a court does not possess subject-matter jurisdiction over an action, it need not inevitably dismiss such action, but may in certain circumstances transfer the cause to a proper court pursuant to Ind. Rules of Procedure, Trial Rule 75(B) in response to a motion to dismiss filed under Ind. Rules of Procedure Trial Rule 12.
In support of his argument that the municipal court lacked jurisdiction over counterclaims in excess of $10,000 Elliott cites IC 1971, 33-6-1-2 (Burns Code Ed.), which provided in pertinent part as follows:
Elliott maintains the language of this jurisdictional statute applies to counterclaims as well as original actions and, therefore, the municipal court lacked jurisdiction over the three counterclaims for $200,000 each.
We agree that absent any contrary legislative mandate the result described by Elliott would follow from the statute. In the past this Court has analogized jurisdictional issues of the municipal court system to similar issues raised in justice of the peace cases. See Johnson v. Greenen, (1934) 98 Ind.App. 612, 188 N.E. 796 5 and Capitol Amusement Co. v. Washington & New Jersey Realty Co., (1929) 90 Ind. App. 389, 164 N.E. 715. It may be generally stated that the municipal court system was created by the Legislature to replace the justices of the peace in the larger cities. Capitol Amusement Co. v. Washington & New Jersey Realty Co., supra. Of course, the Municipal Court of Marion County is only a limited jurisdiction court, with such powers as jurisdictional statutes confer.
We feel it was settled law in Indiana, based on a statute 6 similar to the municipal court provision, that a justice of the peace did not have jurisdiction over a counterclaim which exceeded the jurisdictional amount after crediting the plaintiff's demand. Murphy v. Evans, (1858) 11 Ind. 517; Gharkey v. Halstead, (1849) 1 Ind. 389; Alexander v. Peck, (1840) 5 Blackf. 308. See also Regina Co. v. Galloway, (1912) 50 Ind.App. 92, 98 N.E. 81. Following the language of the jurisdictional statute, the courts in the justice of the peace cases considered whether the amount claimed was outside the jurisdictional mandate. As observed in Murphy v. Evans, supra, "(w)here the amount so 'claimed' exceeds the sum named, the justice would have no jurisdiction, whether the amount be claimed by the plaintiff, or by the defendant on his set-off." Id. at 518.
The approach which was taken with respect to our justice of the peace courts is consistent with the rule followed in a majority of jurisdictions. "In general, a court which has jurisdiction of the plaintiff's claim has jurisdiction of an offset, although it is below the court's minimum jurisdiction; but it does not have jurisdiction of an offset or cross demand which exceeds its maximum jurisdiction." 21 C.J.S. Courts § 66 at 84 (1940). See e. g., Brother International Corp. v. Southeastern Sales Co., (1959) 234 S.C. 573, 109 S.E.2d 444 (county court); and Broad & Branford Place Corp. v. J. J. Hockenjos Co., (1944) 132 N.J.L. 229, 39 A.2d 80 (district court). We hold, however, that the language of the earlier justice of the peace cases, along with the reasoning of those cases cited from other jurisdictions, is inapplicable under present Indiana law because of the provisions of T.R.21(B). That rule, adopted by our Supreme Court and enacted by our Legislature along with the other proposed trial rules at Acts 1969, ch. 191 § 1 at 546, 590, provides in pertinent part as follows:
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