Kostuck v. Vincent D.

• Decision Date: 05 September 1997
• Docket Number: No. 74A01-9706-CV-168,74A01-9706-CV-168
• Citation: 684 N.E.2d 573
• Parties: Robert KOSTUCK, Appellant-Defendant, v. VINCENT D. and Barbara L. Brown, Appellees-Plaintiffs.
• Court: Indiana Appellate Court

Page 573

684 N.E.2d 573

Robert KOSTUCK, Appellant-Defendant, v. VINCENT D. and Barbara L. Brown, Appellees-Plaintiffs.

No. 74A01-9706-CV-168.

Court of Appeals of Indiana.

Sept. 5, 1997.

Jon A. Dartt, Dartt & Dartt, Rockport, for Appellant-Defendant.

OPINION

ROBERTSON, Judge.

Robert Kostuck [Landlord] appeals the judgment entered by the small claims court in favor of Vincent D. and Barbara L. Brown [Tenants] on the Tenants' claim against Landlord for the breach of an implied covenant of habitability. Landlord raises two issues with several subparts. However, as one issue requires reversal, we address it only. Restated, it is:

Whether the trial court employed the appropriate measure of damages for the breach of a covenant in a lease agreement.

FACTS

The facts in the light most favorable to the small claims court's judgment reveal that Landlord and Tenants entered into a written lease agreement whereby Tenants agreed to rent a house from Landlord for $400.00 per month. Tenants paid Landlord a $200.00 damage deposit. The house was in need of some repairs. Additional terms were handwritten at the end of the lease which provided that if the Landlord had not completed five particular repair projects by the time school started, he would refund the $200.00 security deposit to Tenants.

When Tenants arrived at the house to take possession, it was in poor condition. The five particular projects had not been completed. Also, the house was a mess, with buckets and cans standing around. The prior tenant had left debris and discarded items. A door had not been hung. Two walls had huge holes in them due to the anticipated installation of windows.

The Tenants decided not to take possession of the house and instead rented a "similar, suitable" house for $600.00 per month. The Tenants brought the instant lawsuit against Landlord in small claims court. The trial court ruled that Landlord had breached "an implied covenant of habitability" and awarded Tenants $2,400.00, representing the increased amount of rent they were required to pay under the lease of the other house (12 months X ($600.00 - $400.00) = $2,400.00). This appeal ensued.

DECISION

At the outset, we note that Tenants have failed to file an appellee's brief. When an appellee fails to submit a brief, an appellant may prevail by making a prima facie case of error. Rzeszutek v. Beck, 649 N.E.2d 673, 676 (Ind.Ct.App.1995), trans. denied. The prima facie error rule protects this court and relieves it from the burden of controverting arguments advanced for reversal, a duty which properly remains with counsel for the appellee. Id. We also note the appropriate standard of review as set out in City of Dunkirk Water & Sewage Dept. v. Hall, 657 N.E.2d 115 (Ind.1995):

In the appellate review of claims tried by the bench without a jury, the reviewing court shall 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). In determining whether a judgment is clearly erroneous, the appellate tribunal does not reweigh the evidence or determine the credibility of witnesses but considers only the evidence that supports the judgment and the reasonable inferences to be drawn from that evidence. 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 evidence. 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 116 (Citations omitted).

In Sigsbee v. Swathwood, 419 N.E.2d 789 (Ind.Ct.App.1981), the Tenant sued the Landlord for, among other things, a leaking roof. The Sigsbee court noted:

Eviction is either actual or constructive, actual when the tenant is deprived of the occupancy of some part of the demised premises, and constructive when the lessor, without intending to oust the lessee, does an act by which the latter is deprived of the beneficial enjoyment of some part of the premises, in which case the tenant has his right of election, to quit, and avoid the lease and rent, or abide the wrong and seek his remedy in an action for the trespass....

In summary: If an act or omission by the lessor materially deprives the lessee of the beneficial use or enjoyment of the leased property, the lessee may elect to abandon the properly and avoid further obligations under the lease.

Id. at 794 (Citations omitted; emphasis added). With respect to the appropriate measure of damages, the Sigsbee court noted:

We note--for the benefit of the trial court and the parties to this action--the following well established principles regarding damages under contract law. To be recoverable, the damages must be the natural and proximate consequence of the breach. The damages must have been within the contemplation of the parties at the time they entered the contract. Further, the damages must be reasonably ascertainable and not based upon mere speculation or conjecture.

Id. at 796-97 (Citations omitted). The Sigsbee court then relied...