Rueth v. Quinn

• Decision Date: 12 January 1996
• Docket Number: No. 45A04-9502-CV-34,45A04-9502-CV-34
• Citation: 659 N.E.2d 684
• Parties: Claudia RUETH a/k/a Claudia Firrek, Appellant (Defendant Below), v. John QUINN and Kathleen Quinn, Appellees (Plaintiffs Below).
• Court: Indiana Appellate Court

Page 684

659 N.E.2d 684

Claudia RUETH a/k/a Claudia Firrek, Appellant (Defendant Below), v. John QUINN and Kathleen Quinn, Appellees (Plaintiffs Below).

No. 45A04-9502-CV-34.

Court of Appeals of Indiana.

Jan. 12, 1996.

Transfer Denied May 28, 1996.

Michael L. Muenich, Highland, for appellant.

Timothy O. Malloy, George C. Patrick, Schreiner & Malloy, P.C., Schererville, for appellees.

OPINION

DARDEN, Judge.

STATEMENT OF THE CASE

Claudia Rueth appeals the trial court's judgment ordering her to: 1) return John and Kathleen Quinns' $1,100.00 security deposit, and 2) pay the Quinns' attorney $750.00. We affirm in part, reverse in part, and remand.

ISSUE

Did the trial court err in ordering Rueth: 1) to return the Quinns' $1,100.00 security deposit, and 2) to pay the Quinns' attorney $750.00?

FACTS

In 1991, Claudia Rueth owned a home in St. John, Indiana, which she leased to John and Kathleen Quinn. The lease, which is dated December 5, 1991, covered the period from January 10, 1992 to June 10, 1992, a five-month lease. The monthly rent was $1100.00, payable on the tenth of each month. The lease further contained the following pertinent provisions:

The security deposit of $1100.00 is not considered the first or last month's rent.

The parties of the second part, Mr. and Mrs. Jack Quinn shall have the first right to refuse should the property at 9760 Hickory Lane, St. John, Indiana 46373 go on the market for sale.

(R. 85). The lease did not require notice of renewal or notice of extension. After the written lease expired on June 10, 1992, Rueth continued to accept monthly rent payments from the Quinns.

In July or August 1992, after the written lease had expired, Rueth advised the Quinns that she was considering selling the house. During the fall, Rueth advised the Quinns that the house was for sale. The Quinns expressed an interest in buying the house; however, their negotiations with Rueth terminated when the Quinns told Rueth that they would not pay over $175,000.00 for the house. On November 16, 1992, Rueth accepted a $190,000 offer on the house from a third party.

In mid- to late November, Rueth gave the Quinns verbal notice of the sale and advised them that they would need to vacate the house at the end of December, 1992, because the purchasers wanted to be in the house by Christmas. The Quinns asked Rueth if they could stay in the house until early January because the house they were purchasing was still under construction, and Mr. Quinn's elderly aunt, who lived with the Quinns, was ill. Rueth told the Quinns that she would talk to the purchasers to see if they would wait until after Christmas to take possession. Rueth then worked out an agreement with the purchasers so that the Quinns could stay in the house through Christmas. However, Rueth told the Quinns that they had to be out of the house by January 15, 1993, because closing was scheduled for not later than that date, and the contract between Rueth and the purchasers provided that Rueth would surrender possession of the premises to the purchasers on or before January 15. Rueth further told the Quinns that the contract provided that if Rueth failed to surrender possession of the premises by January 15, Rueth would have to pay the purchasers $60.00 per day as liquidated damages. According to Rueth, she asked the Quinns if she "[had] to put this in writing," and the Quinns said, "no, we understand. Don't bother writing." (R. 145).

In early January 1993, the Quinns had not vacated the premises, and Rueth reminded them that she had to have possession of the house by January 15. According to Rueth, she "thought [they] were operating on a friendly basis and [she] trusted them to be out." (R. 136). The Quinns told Rueth that they did not know when they would get out because they did not know when they could take possession of and occupy their new house. Rueth and the Quinns agreed that Rueth would take the rent owed for the days in January after the 10th out of the Quinns' security deposit.

On January 11, 1993, Rueth sent the Quinns the following letter:

This is to inform you that you must be out of the house at 9760 Hickory Lane, St. John Indiana by 9:00 A.M. on Friday the 15th of January. Per my sales agreement and my agreement with you of the 17th of Nov. 1992, the buyer of the house was willing to extend the possession date to allow you to remain in the house over Christmas and to allow you enough time to relocate. He is unwilling to wait any longer. Bill's Movers in Highland Indiana has time to move you over the 13th and 14th of January and also has space to store your things if need be.

Please notify me of your plans by the 13th of January or sooner if possible.

(R. 104).

The Quinns received the demand on January 12; however, they did not leave the premises by January 15. ¹ As a result, Rueth was unable to close the sale of her house pursuant to the terms of the contract with the purchasers. Both the realtor and the purchasers were threatening to sue Rueth. The Quinns moved out on January 18, and Rueth was able to close the sale on January 19. As a result of the delay, Rueth paid the purchasers $400.00, $100.00 per day, to compensate them for the late closing. ² Rueth also had to pay $100.00 late closing charges to Lake Mortgage Company. On January 29, 1993, Rueth provided the Quinns with the following statement of damages:

(R. 109).

On July 2, 1993, the Quinns filed a complaint in small claims court alleging that Rueth had failed to return their security deposit. The Quinns demanded a $816.13 judgment against Rueth. (R. 12). At trial, Mr. Quinn requested his security deposit less the rent which he and his wife owed Rueth for the period January 10-18 and, pursuant to the security deposit statute, $1,228.16 for attorney fees. Following a bench trial, the trial court ordered Rueth to: 1) pay the Quinns $1100.00, and 2) pay the Quinns' attorney $750.00. The trial court did not make any findings of fact or conclusions of law.

DECISION

When the trial court makes no findings of fact, we presume the judgment is based on findings supported by the evidence. Union Federal Sav. v. INB Banking Co. (1991), Ind.App., 582 N.E.2d 426, 428. We must affirm the trial court's judgment if it can be sustained on any legal theory supported by the evidence. Id. When making this determination, we do not reweigh the evidence or assess the credibility of witnesses. Instead, we consider only the evidence most favorable to the judgment together with all reasonable inferences drawn therefrom. Id.

Rueth argues that the trial court erred in ordering her: 1) to return the Quinns' $1,100.00 security deposit, and 2) to pay the Quinns' attorney $750.00. We agree that the trial court erred in ordering Rueth to return all of the Quinns' security deposit; however, the trial court did not err in ordering Rueth to pay the Quinns' attorney $750.00.

Ind.Code 32-7-5-1 through -19 concern the duties of landlords to return security deposits to tenants. The provisions most relevant to our decision, which are found in I.C. 32-7-5-12, 13, and 14, provide:

32-7-5-12(a) Upon termination of the rental agreement, all of the security deposit held by the landlord shall be returned to the tenant, except for any amount applied to:

(1) The payment of accrued rent;

(2) The amount of damages that the landlord has or will reasonably suffer by reason of the tenant's noncompliance with the law or the rental agreement; and

(3) Unpaid utility or sewer charges that the tenant is obligated to pay under the rental agreement;

all as itemized by the landlord in a written notice delivered to the tenant together with the amount due within forty-five (45) days after termination of the rental agreement and delivery of possession. The landlord is not liable under this subsection until supplied by the tenant with a mailing address to which to deliver the notice and amount prescribed by this subsection. Unless otherwise agreed, the tenant is not entitled to apply a security deposit to rent.

(b) If the landlord fails to comply with subsection (a), the tenant may recover all of the security deposit due the tenant and reasonable attorney's fees.

(c) This section does not preclude the landlord or tenant from recovering other damages to which either is entitled.

(d) The owner of the dwelling unit at the time of the termination of the rental agreement is bound by this section.

32-7-5-13 A security deposit may be used only for the following purposes:

(1) To reimburse the landlord for actual damages to the rental unit or any ancillary facility that are not the result of ordinary wear and tear expected in the normal course of habitation of a dwelling.

(2) To pay the landlord for all rent in arrearage under the rental agreement, and rent due for premature termination of the rental agreement by the tenant.

(3) To pay for the last payment period of a residential rental agreement where there is a written agreement between the landlord and the tenant that stipulates the security deposit will serve as the last payment of rent due.

(4) To reimburse the landlord for utility or sewer charges paid by the landlord that:

(A) Are the obligation of the tenant under the rental agreement; and

(B) Are unpaid by the tenant.

32-7-5-14 In case of damage to the rental unit or other obligation against the security deposit, the landlord shall mail to the tenant, within forty-five (45) days after the termination of occupancy an itemized list of damages claimed for which the security deposit may be used as provided in section 13 [IC 32-7-5-13] of this chapter, including the estimated cost for each damaged item and the amounts and lease on which the landlord intends to assess the tenant. The list must be accompanied by a check or money order for the difference between the damages claimed and the amount of the security deposit held by the landlord.

A. Timeliness of the Notice

Rueth sent the Quinns an itemized list of damages on ...