Old Town Development Co. v. Langford

Decision Date17 June 1976
Docket NumberNo. 2--973A207,2--973A207
Citation349 N.E.2d 744
PartiesOLD TOWN DEVELOPMENT COMPANY (a partnership) et al., Appellants, v. Robert J. LANGFORD et al., Appellees.
CourtIndiana Appellate Court

Howard J. DeTrude, Jr., John T. Lorenz, John N. Thompson, Kightlinger, Young, Gray & DeTrude, Indianapolis, for appellants.

Christopher Kirages, Clarence H. Doninger, Alan H. Goldstein, Dutton, Kappes & Overman, Indianapolis, for appellees.

BUCHANAN, Presiding Judge.

CASE SUMMARY

Defendant-Appellants Old Town Development Company, a partnership, consisting of Sidney D. Eskenazi, Marvin Mitchell, Louis Dubby Yosha and Max Nelson We affirm.

(generally referred to as Old Town) appeal from adverse judgments amounting to Five Hundred Five Thousand Five Hundred 00/100 Dollars ($505,500.00) in favor of Plaintiff-Appellee Robert J. Langford (individually and as Administrator of his wife's estate), on Langford's Complaints for personal injuries, personal property damage, and wrongful death of his wife and two children in an apartment fire, Old Town claiming an erroneous jury instruction by the trial court on two of Langford's three theories of recovery (implied warranty of habitability by lessor and strict liability in tort of lessor for leasing an apartment with a defective heating system), insufficiency of the evidence, an erroneous instruction as to a lease exculpatory clause, and excessiveness of the verdict in Langford's individual action.

FACTS

The evidence and facts most favorable to Langford and the judgments are:

On December 13, 1970, Langford and his wife (Frances) signed a one-year lease with Old Town for a two-story, three bedroom apartment located at 1234 Old Town, South Drive, (Phase II) in Indianapolis, Indiana. Execution of the lease took place in the presence of Jacob Crist, manager of the Old Town Apartment complex.

On March 17, 1971, approximately three months after Langford's entry into possession and twenty Months following the completion of Phase II of the Old Town Apartment complex, a fire broke out in the Langford apartment, devastating all of its contents and resulting in the death of Langford's wife (Frances) and two children (Gregory and Denise). After a vain endeavor to reach his children, Langford sustained severe injuries as he was forced to leap from a second story window which he had broken out with his hand.

Langford filed two complaints in the Superior Court of Marion County on October 20, 1971, one individually and the other as Administrator of the estate of his deceased wife, against Old Town and Joe Ogle, d/b/a Ogle Sheet Metal Company (Ogle). Individually, Langford sought damages for personal injuries, personal property loss, and the wrongful death of his two children, alleging liability upon 'any or all' of the following theories: (1) negligence, including negligence based upon res ipsa loquitur; (2) breach of implied warranty of habitability; and (3) strict liability in tort based upon the defective heating system. As Administrator, Langford further sought compensation for the wrongful death of his wife upon facts and theories identical to those in his first action.

On March 20, 1973, trial by a jury commenced. It was stipulated that all three deaths were the result of the fire of March 17, 1971 and that:

'. . . Defendant Old Town Development Company on March 17, 1971 was the owner of an apartment located at 1234 Old Town, South Drive, and such premises had been leased pursuant to written lease to Robert J. Langford and his family by Defendant Old Town Development Company.

'. . . Sidney E. Eskenazi, Marvin Mitchell, Louis Buddy Yosha and Max Nelson are the general partners of Old Town Development Company and were on March 17, 1971.

'. . . Defendant Joe Ogle d/b/a Ogle Sheet Metal Company, by and through his employees, installed the heating system in the apartment located at 1234 Old Town, South Drive, Indianapolis, Indiana.'

Langford sought recovery from Old Town as owner-landlord of the devastated apartment, while the liability of Ogle was predicated upon his role as subcontractor-supplier-installer of the alleged defective heating system.

The evidence at trial established that the twelve acre Old Town Apartment complex was located at the northeast corner of State Road 100 and Ditch Road, Indianapolis, Indiana. Old Town originally acquired title to the unimproved three and one-half acre parcel encompassing Phase II of the complex (on which Langford's apartment was located) in 1968 by a deed prepared by Marvin Mitchell, in partial fulfillment of a conditional sales contract with Colony Development Corp. By deed dated the same day, Old Town conveyed title to that tract to Mey, Inc., an Indiana Corporation incorporated by Mitchell and of which Sidney D. Eskenazi, Marvin Mitchell, Louis Buddy Yosha and Max Nelson were the officers and directors.

Mey, Inc. then contracted with Town Construction Corp., another Indiana corporation incorporated by Mitchell and of which Eskenazi, Mitchell, Yosha and Nelson were the officers and directors to construct the apartment complex in accordance with plans and specifications prepared by an architect employed by Old Town. Town Construction Corp.'s charter was subsequently revoked by the Indiana Secretary of State effective June 1, 1970, for failure to file annual reports.

Both corporate entities involved in the development of the complex (Mey, Inc. and Town Construction Corp.) appointed Mitchell their Resident Agent and the Principal Office of each corporation was located at 2220 North Meridian Street, Indianapolis, Indiana, the address of the law firm of Eskenazi, Mitchell & Yosha. Defendant Joe Ogle testified that he dealt at all times directly with Mitchell regarding the Old Town project, having submitted his bid, received an acceptance, and signed the contract for installation of heating systems in forty (40) apartments directly with Marvin Mitchell.

Following the completion of Phase II in July of 1969, a second deed prepared by Mitchell conveyed the tract from Mey, Inc. back to Old Town. The terms of this deed instrument recited that Mey, Inc. held title to the property as 'nominee' for the partnership and that there had been no consideration for the transaction. Mitchell's own testimony at the trial confirmed that 'no money passed hands' in either transaction.

Three experts testified as to the origin and cause of the fire. Following independent investigations each testified that the area of deepest charring, and thus the point of origin of the fire, was the enclosed area between the ceiling of the first story and the floor of the second story immediately above the furnace. A deteriorated section of flue vent (Metalbestos, Type RV) consisting of a malleable aluminum interliner and an outer steel casing, with air insulation between, was discovered within this enclosed area in close proximity to the wooden joists located between floors. After eliminating such potential causes as electrical malfunctions, chemical agents such as kerosene or gasoline, the careless use of cigarettes, cigars, or other smoking materials, and finally the possibility of arson, the experts were in agreement 'that the only thing in the area that was likely to cause the fire would have been from the furnace or the components of the furnace', i.e., the flue vent.

The further testimony of one expert placed this flue vent approximately one-half inch from the adjacent combustible material (i.e., one of the wooden joists) in direct violation of the building code and the manufacturer's own specifications (both requiring at least a one-inch clearance between the flue vent and all combustible matter). Old Town's witnesses, George F. Ewing, a Heating and Air Conditioning Inspector for the Metropolitan Development of Buildings, and William Richard Stats, a Vice President of Polytechnique, Inc., and a licensed chemical engineer specializing in combustion gas equipment, stated that if the flue vent were closer than one inch to the combustible material, it would create a 'dangerous situation' due to the heat radiating from Cecil Wheeler, Chief Heating Investigator of the Metropolitan Development Department of Buildings, testified that normal procedure requires two inspections of all new construction, one prior to the installation of the dry wall and the other following the completion of all work. He explained that the initial or 'rough-in' inspection is of great importance in that only then is the pipe and duct work fully visible to the inspecting official.

the pipe even in the absence of a breach therein. As Stats explained at trial, the reason for the mandatory one-inch clearance is 'because of the temperature of the pipe (flue vent), if it's too close to the combustibles, it can cause it to catch fire.'

George F. Ewing, a Heating and Air Conditioning Inspector for the Department, subsequently testified that only one inspection of the Old Town complex was made, which was after all work was completed and the flue vent was only visible to the point where it entered the first floor ceiling above the furnace. Thus, it could be inferred that if the required initial inspection had been made at the 'rough-in' stage, it could have been determined that the flue vent was too close to combustible material, i.e., less than one inch as required by the building code and the manufacturer's specifications.

Regarding the maintenance and control of the heating system, Jacob Crist, manager of the Old Town Apartment complex, testified that all repairs and maintenance of furnace and heating systems were normally handled by Old Town and not the tenant. This confirmed Langford's testimony concerning his experience with respect to a two-bedroom apartment he rented from Old Town prior to moving to the apartment involved in this case.

Langford testified as to four categories of damages in his two actions. First, he sustained injuries...

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  • Pugh v. Holmes
    • United States
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    ...1240. This warranty is applicable both at the beginning of the lease and throughout its duration. Id. citing Old Town Development Co. v. Langford, 349 N.E.2d 744, 764 (Ind.App.1976) and Mease v. Fox, 200 N.W.2d 791, 796 (Iowa In order to constitute a breach of the warranty the defect must b......
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