Schoknecht v. Hasemeier

• Decision Date: 20 September 2000
• Docket Number: No. 49A02-0003-CV-168.,49A02-0003-CV-168.
• Citation: 735 N.E.2d 299
• Parties: Jean D. SCHOKNECHT, Appellant-Plaintiff, v. Susan E. HASEMEIER, Appellee-Defendant.
• Court: Indiana Appellate Court

735 N.E.2d 299

Jean D. SCHOKNECHT, Appellant-Plaintiff, v. Susan E. HASEMEIER, Appellee-Defendant.

No. 49A02-0003-CV-168.

Court of Appeals of Indiana.

September 20, 2000.

Clifford W. Shepard, Indianapolis, Indiana, Attorney for Appellant.

David M. Seiter, L. Strodtman & Associates, Cumberland, Indiana, Attorney for Appellee.

OPINION

BAKER, Judge

Appellant-plaintiff Jean D. Schoknecht (Landlord) appeals the trial court's grant of summary judgment in favor of Susan E. Hasemier (Tenant). Landlord raises three issues on appeal which we consolidate and restate as whether the trial court erred when it concluded that Landlord failed to comply with the notice provisions of IND.CODE § 32-7-5-1 to -19, (the Security Deposits statute).

FACTS

On August 28, 1995, Landlord entered into a lease agreement with Tenant for residential property (premises) located in Indianapolis. The lease was for a period of one year, and pursuant to its terms Tenant paid Landlord a $750.00 security deposit. After the lease period expired, Tenant continued to lease the premises on a "month-to-month" basis, during which Tenant remained subject to all the terms and conditions of the lease. The lease contained provisions wherein Tenant agreed to "reimburse Landlord for loss or damage to the demised premises occasioned by her or her guest's negligence or other act" and to be responsible for "attorneys fees, court costs, collections expenses, and all other out-of-pocket expenses that Landlord becomes liable for as a result of any breach of this lease by Tenant." Record at 16.

Tenant subsequently defaulted on the lease by allegedly committing waste and failing to make lease payments when due.¹ On April 10, 1997, Landlord filed a Notice of Claim for damages against Tenant in Wayne small claims court. Thereafter, on April 22, 1997, Landlord obtained a judgment against Tenant, which entitled Landlord to possession of the premises on May 1, 1997. The court then set the matter for hearing on damages.

On June 12, 1997, Tenant formally requested the return of her security deposit by sending written notice to Landlord. In response, Landlord sent a letter to Tenant, dated June 13, 1997, claiming alleged damages in excess of the security deposit. The letter contained an itemized list of damages along with the "[e]stimated cost of Repair." R. at 33. Among these estimated costs were amounts for cleaning supplies and labor; for repairing damage to walls, blinds, screens and base boards; for carpet cleaning and replacement; for home foundation (slab) sealing; for replacing water-damaged shelves; for film, processing and photographs;² and for replacement of various trees and shrubs that Tenant allegedly removed from the yard. On November 4, 1997, Landlord dismissed her damages claim against Tenant without prejudice.³

On May 8, 1998, Tenant filed suit against Landlord for her security deposit in Wayne small claims court. On August 4, 1998, the day of the small claims trial, Landlord filed an independent claim against Tenant in Marion Superior Court for damages in excess of the security deposit, and asked the court to consolidate the two causes in that court. The Marion Superior Court granted Landlord's request for consolidation and Tenant's claim was transferred from the Wayne small claims court. On November 1, 1999, Tenant moved for summary judgment on the basis that Landlord had failed to comply with the notice requirements of the Security Deposits statute. Specifically, Tenant asserted that the June 13, 1997 letter from Landlord contained damages that Landlord was not legally entitled to deduct from the security deposit. In particular, those damages included expenditures for cleaning the premises; film, processing and photographs; tree and shrub replacement; and repairing damage to carpet, carpet pads and the foundation slab. On February 2, 2000, the trial court granted Tenant's motion for Summary Judgment. Landlord now appeals.

DISCUSSION AND DECISION

I. Standard of Review

The standard of review of a summary judgment is well settled. This court applies the same standard as the trial court. USA Life One Ins. Co. v. Nuckolls, 682 N.E.2d 534, 537 (Ind.1997). We do not weigh the evidence designated by the parties. Instead, we liberally construe the evidence in the light most favorable to the non-moving party. Id. Summary judgment is appropriate only if the pleadings and evidence show both the absence of a genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Ind. Trial Rule 56(C); Butler v. City of Indianapolis, 668 N.E.2d 1227, 1228 (Ind.1996). Where material facts conflict, or undisputed facts lead to conflicting material inferences, summary judgment is inappropriate. Id.

We also note that in accordance with Rueth v. Quinn, 659 N.E.2d 684 (Ind.Ct. App.1996), trans. denied, this court has determined that a landlord will be found to have failed to comply with the notice requirement of the Security Deposits statute where 1) that landlord erroneously calculates the tenant's damages, 2) the tenant resorts to legal action to collect all or part of his deposit, and 3) the tenant was entitled to a return of all or part of the tenant's deposit. Id. at 689.

II. Landlord's Claim

Landlord contends that Tenant failed to establish two of the three necessary elements set out in Rueth, and, therefore, Tenant is not entitled to summary judgment. Specifically, Landlord argues that she did not erroneously calculate Tenant's damages and that Tenant is not entitled to a return of any portion of her security deposit.

Tenant asserts that Landlord's calculation of damages is erroneous because the June 13, 1997 letter contains items that Landlord is not legally entitled to deduct from the security deposit and because Landlord failed to substantiate the estimated costs of repair. In response to Tenant's assertions, Landlord argues that the letter contains a good faith estimate of all the damages allegedly due under the lease, including those covered by the security deposit, and that her failure to list these damages separately does not constitute non-compliance with the Security Deposits statute. Landlord also asserts that she complied with the statute by submitting an estimated cost of damages and that the statute does not require her to substantiate her itemized list of damages.

To resolve this issue we first note the relevant provisions of the Security Deposits statute. Section 14 of the statute contains strict notice requirements which provide, in relevant part:

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 13⁴ 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.

I.C. § 32-7-5-14.

If the landlord complies with the notice of damages requirement, he or she is entitled to retain the tenant's security deposit and apply it towards "the amount of damages that the landlord has or will reasonably suffer by reason of the tenant's non-compliance with the law or rental agreement." I.C. § 32-7-5-12(a)(2). However, where the landlord fails to comply with the statutory notice requirement this "constitutes agreement by the landlord that no damages are due, and the landlord must remit to the tenant immediately the full security deposit." I.C. § 32-7-5-15; Pinnacle Props. v. Saulka, 693 N.E.2d 101, 103-04 (Ind.Ct.App.1998), trans. denied. We further note that "the Security Deposit statute applies only to security deposits" and that the statute "clearly and unambiguously preserves the right of the...