Lafayette Realty Corp. v. Vonnegut's, Inc.
| Decision Date | 19 January 1984 |
| Docket Number | No. 1-383A95,1-383A95 |
| Citation | 458 N.E.2d 689 |
| Parties | LAFAYETTE REALTY CORPORATION, Plaintiff-Appellant, v. VONNEGUT'S, INC., Vonnegut Hardware Co., Inc., and Schlage Lock Co., Defendants-Appellees. |
| Court | Indiana Appellate Court |
Paul G. Roland, Walter F. Lockhart, Ruckelshaus, Roland & O'Connor, Indianapolis, for plaintiff-appellant.
Joseph B. Carney, Mary K. Lisher, Baker & Daniels, Indianapolis, for Schlage Lock Co.
John J. Kish, Indianapolis, for Vonnegut's, Inc.
In an action tried to the Hancock Circuit Court judgment was rendered for the defendants, Vonnegut's, Inc., Vonnegut Hardware Co., Inc., (Vonnegut's) and Schlage Lock Co., upon Lafayette Realty Corporation's complaint for damages arising from the defendants' default on a lease and guarantor contract. 1 Lafayette appeals.
We affirm.
In October of 1959 Lafayette and Vonnegut's executed a lease in which the latter agreed to lease from the former a storeroom in an Indianapolis shopping center for the purpose of conducting a retail hardware business. 2 The lease provided, inter alia, that "[Vonnegut's] shall keep the ... heating plant ... in a good state of repair, but [Vonnegut's] shall not be required to replace the heating plant ... or to make any replacements of any parts thereof which are of such a nature as to constitute capital replacements." Record at 446. Instead, the lease continued: "[Lafayette] agrees to make any capital replacements of or to the heating plant ... which may become necessary during the term of this lease." Id. In the event Lafayette failed to adhere to the above-stated terms of the lease, the parties provided the following alternative:
During a routine service inspection of the store's heating plant on October 19, 1972, the heat exchanger was found to have deteriorated to the extent holes were visible and carbon monoxide fumes leaked into the store when the system was operated. Because of this danger Vonnegut's was advised to refrain from operating the system until the heat exchanger was replaced. 3 Vonnegut's advised Lafayette of the problem immediately.
In response, a Lafayette maintenance employee and an employee of Thiele Heating and Air Conditioning, Inc., were sent by Lafayette to the store to inspect the heating plant. Following their inspection, they advised Lafayette that the entire heating plant should be replaced.
After several unanswered telephone calls to Lafayette's president, Vonnegut's general manager finally contacted Thomas Voigt, Lafayette's vice-president. Voigt expressed he had little knowledge of the problem, but proposed an arrangement wherein Lafayette would pay half of the cost of replacing the system if Vonnegut's agreed to pay the balance. Vonnegut's general manager rejected the offer verbally and confirmed the rejection in a letter dated October 31. 4 Subsequent to this letter there were no further communications between the parties until Vonnegut's notified Lafayette it had vacated the premises.
With the heating plant inoperative, Vonnegut's store became increasingly uncomfortable and ill-suited for conducting business. 5 Despite attempts to heat the store with portable heaters, employees found it necessary to wear coats, hats, and gloves while at work. Even with these efforts the store was closed early on several occasions because of the cold conditions. Finally, on November 24, Vonnegut's vacated the premises and surrendered possession to Lafayette. 6
After installing new heating units in the store on December 1, Lafayette contacted Vonnegut's for the first time since October and advised Vonnegut's that it would be expected to comply with the terms of the lease. Vonnegut's, however, refused to move its operations back to the Lafayette property thereby prompting Lafayette's action for breach of the lease.
In its defense, Vonnegut's contended the lack of heat and Lafayette's refusal to make the needed repairs within a reasonable time constituted a constructive eviction. The trial court agreed and rendered judgment for Vonnegut's.
Restated, the issues presented by Lafayette are:
1. Whether there was sufficient evidence to support the trial court's finding 2. Whether Lafayette was afforded a reasonable time within which to replace the heating plant before Vonnegut's quit the premises?
that Vonnegut's was constructively evicted?
3. Whether Vonnegut's previous conduct in making necessary capital replacements made its refusal to replace the defective heating plant a breach of the terms of the lease?
At the outset we find it necessary to discuss the applicable standard of review. While the parties state in their briefs that Lafayette is appealing from a negative judgment and must therefore show it to be contrary to law, they are wrong. By granting judgment to Vonnegut's on grounds it was constructively evicted the trial court did not, ipso facto, find Lafayette had failed to sustain its burden of proof. Instead, it simply found Vonnegut's had sustained its burden of proof as to the affirmative defense of constructive eviction. Consequently, Lafayette is not appealing from a negative judgment. See Ross v. Ross, (1979) Ind.App., 397 N.E.2d 1066, 1068; State v. Boyle, (1976) 168 Ind.App. 643, 645, 344 N.E.2d 302, 304, trans. denied.
In the instant case, Lafayette appeals from a judgment rendered by a court trial. Thus, it will not be disturbed unless we find it to be clearly erroneous. Peoples Trust & Savings Bank v. Humphrey, (1983) Ind.App., 451 N.E.2d 1104, 1112; Litzelswope v. Mitchell, (1983) Ind.App., 451 N.E.2d 366, 369; Indiana Rules of Procedure, Trial Rule 52(A). Such a finding will be made only if there are no facts or inferences to be drawn therefrom which are supportive of the judgment. Kimbrell v. City of Lafayette, (1983) Ind.App., 454 N.E.2d 73, 74. Moreover, we will neither reweigh the evidence nor judge the credibility of witnesses, but instead, will give due regard to the trial court's ability to perform this function. Litzelswope, 451 N.E.2d at 369.
The applicable standard of review thus stated, we turn to the substantive issues.
Lafayette first argues there was insufficient evidence to support the trial court's finding of constructive eviction. More specifically, Lafayette asserts that the defect in the heating plant was neither substantial or permanent in character, nor shown to be of such a nature as to require Lafayette to make a capital replacement as contemplated in the lease. This contention is without merit.
Constructive eviction has been defined as a dispossession by a lessor who, without intending to oust the lessee, commits an act which serves to deprive the latter of the beneficial use of some part of the premises. Talbott v. English, (1901) 156 Ind. 299, 307, 59 N.E. 857, 860. This act or breach by the lessor, however, must be "so substantial and permanent in character" as to effectively exclude the lessee from a beneficial use of the property. Id., 156 Ind. at 305-06, 59 N.E. at 860.
In the instant case there is abundant evidence to support the trial court's conclusion that Lafayette's breach was "substantial and permanent in character" and served to effectively exclude Vonnegut's from any beneficial use of the store. Upon discovering the defect on October 19, Vonnegut's notified Lafayette immediately. The next day, following an inspection by Lafayette's own maintenance employee and a private contractor hired by Lafayette, the suspected nature of the defect was confirmed and Lafayette was advised that the heating plant needed...
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